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Greece Presents Austerity Budget for 2011

The Greek draft 2011 budget announced Monday by the finance ministry aims to cut the budget deficit to 7% of gross domestic product, ahead of the promised 7.6% target requested by its international lenders.
That means that the fiscal gap in 2011 would be EUR16.35 billion, down from EUR18.5 billion this year.
In May, the debt-strapped Mediterranean country promised to cut the 2009 budget deficit from 13.6% of GDP in 2009, to 8.1% by end of 2010 in exchange for a EUR110 billion bailout from the International Monetary Fund and the European Union.
It has had to imposing unprecedented austerity measures, including wage and pension cuts as well as increases to VAT and excise taxes in 2010, which have led to widespread protests.
The 2011 draft budget continues these austerity policies and foresees that revenues will rise 6.9% on the year to reach EUR56.3 billion and expenditure will be cut 5.9% on the year to EUR67.5 billion.
The budget forecasts that the economy will contract by 2.6% in 2011 after a fall of 4% in 2010.

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