17 Feb 2010

Greece told to make further cuts

7:02 am on 17 February 2010

Greece has been warned by European finance ministers that it must make further cuts to spending and public sector wages or face more sanctions.

A joint statement from the 16 eurozone nations it said Greece needed to get its debt under control and calm "irrational" financial markets.

Last week, the European Union vowed to help Greece if needed. But the idea of bailing out a euro nation has been badly received, prompting a harsher stance.

Greece's woes have sent the value of the euro down to a nine-month low recently.

Now it has been told that further measures will be imposed if its debt reduction plans are not on target by 16 March.

The BBC reports Greece is trying to reduce its public deficit from 12.7% - more than four times the level that single currency rules allow.

It has pledged to reduce this to 8.7% during 2010 under an austerity plan that involves major cuts in public spending. But the plans are hugely unpopular with the public.

Greek bank shares fell again on Tuesday. The main stock index is down 14.6% so far this year.

Finance Minister George Papaconstantinou has said repeatedly that Greece is not asking for financial help from Brussels.