My finance view

European finance chiefs said Greece may have to step up its efforts to tackle a national fiscal crisis that threatens to spread to other countries across the region.

“The Greek government is aware of the magnitude of the problems facing the country,” Luxembourg’s Jean-Claude Juncker told reporters in Brussels late yesterday after leading a meeting of euro-area finance ministers that discussed Greece’s budget plan. “The measures are a step in the right direction. We’ll have to see whether they’re enough.”

Greece last week presented its plan to push down a budget deficit that is still more than four times the European Union limit of 3 percent of gross domestic product. European Central Bank President Jean-Claude Trichet on Jan. 14 turned up the pressure on Greece, saying no nation can expect any “special treatment” after rating downgrades sparked a rout in Greece’s bonds in December and fueled concerns about default.

The Greek government’s latest proposals call for about 10 billion euros ($14.4 billion) of spending cuts and revenue increases this year to bring the budget shortfall from 12.7 percent of output to 8.7 percent by year end.

“The Greek plan leans heavily on the income side,” Dutch Finance Minister Wouter Bos said after yesterday’s meeting. “It leans heavily on one-time measures,” he said, adding that the program “needs to be more substantial.”

More-Reliable Statistics

The government in Athens presented a “very ambitious” budget-cutting program, Greek Finance Minister George Papaconstantinou told reporters yesterday. Greek officials also pledged to provide more-reliable statistics after the EU said earlier this month that the country’s data contained “severe irregularities.”

While the Greek government still has “difficult work to do,” German Finance Minister Wolfgang Schaeuble said the “serious reforms made to their statistics will help detect and avoid more problems like this in the future.” Bos said a “strong exercise” is required to make Greek data “reliable again.”

Juncker, who serves as Luxembourg’s premier and treasury minister, won a new term as head of the so-called eurogroup at yesterday’s meeting. He was unanimously appointed to a fresh term of two and half years under the Lisbon Treaty, which came into force in December.

The finance chiefs delayed until next month a decision on who will succeed Lucas Papademos as vice president of the European Central Bank, Juncker said. Luxembourg central bank chief Yves Mersch, his Portuguese counterpart Vitor Constancio and ECB Banking Supervision Committee Chairman Peter Praet are the three candidates being considered for the post.

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