Greece agrees to more austerity cuts

Financial Times
June 24, 2011

Greece has agreed additional spending cuts after international lenders found that the €28bn ($40bn) austerity package agreed last month was no longer sufficient and demanded Athens close a €5.5bn “black hole” in the plan before it is approved by legislators next week.

George Papandreou, Greek prime minister, has already struggled to gain support for the plan, which the European Union and International Monetary Fund have insisted is a prerequisite for a €12bn aid payment, which Athens must receive by mid-July or it will default on its sovereign debt.

But a technical team sent to Athens this week by the so-called troika – EU, IMF and European Central Bank – identified a financing gap of €5.5bn in the four-year programme of fiscal and structural reforms, according to a Greek official.

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