EU finance ministers have set Greece a deadline of May 15 to take 'urgent measures' to control its budget deficit. This is in addition to a mid-March deadline for a review of its progress so far.
A statement after a meeting of ministers in Brussels called on Greece to implement 'specific budgetary consolidation measures, including those presented in its stability programme'.
It said Greece should present a report by March 16 setting out a timetable for the implementation of budget target measures for 2010, and another by May 15 setting out the policy measures needed to comply with the finance ministers' decision. Quarterly reports will be required from then on, the ministers said.
They have called for a 'bold and comprehensive' package of reforms to begin this year. These include specific measures covering wages, pension reform, healthcare reforms, public administrations and employment growth.
Greece has committed itself to reducing a 2009 deficit running to 12.7% of GDP by four percentage points over the course of 2010, and is under semi-permanent surveillance by the European Commission as it implements drastic cuts.
The EU's budgetary chief Olli Rehn said last night that the lessons of the Greek debt crisis were that the euro zone 'stands ready to propose further necessary measures if required.' He said the euro zone "urgently needs broader, deeper surveillance' with strengthened co-ordination of national economic policies across the euro area.
Follow Ireland, urges German minister
At today's EU ministers' meeting, Germany's deputy finance minister said Greece should mimic Ireland and Latvia, both of which are slashing spending and wages savagely. 'We made it clear the ball is in Greece's court,' said Joerg Asmussen. 'Additional measures by Greece are needed.'
The ministers said nothing about specific support measures or aid, opting instead to heap pressure on Greece in return for the promise to support it if things get out of hand, a pledge made by European leaders last Thursday.
Mr Asmussen and others suggested the International Monetary Fund's advice, but not its money, would be needed too to help Greece meet its budgetary challenges.
European Monetary Affairs Commissioner Olli Rehn said that experts from the European Commission, IMF and European Central Bank 'will be on the ground in Athens in the coming days' to check up on implementation of steps announced so far.
Part of Greece's battle is one of credibility after years of official statistical reporting on its finances that Swedish Finance Minister Anders Borg has called 'basically fraudulent'.
Markets appeared relatively unperturbed by the developments. The extra interest investors demand for holding Greek debt rather than German bonds rose by almost a third of a percentage point at one stage today to 3.35 points, its highest in a week, but later came back to below 3.2 points.
