Caught between striking workers and sceptical EU officials, Greece's crisis-hit government will have to brief the EU's budget chief next week on its plans to tame the country's massive debt.
European Union economic affairs commissioner Olli Rehn said he would personally inspect Greek plans after receiving a report from EU, European Central Bank and IMF experts who audited Athens' finances this week.
'I'm planning to go to Greece next week to discuss the fiscal and economic situation and the future financial stability of the euro zone,' Rehn said.
As the country with the highest publicdeficit in the euro zone, Greece is at the centre of a storm over spiralling debt levels in Europe that has threatened cohesion in the European single currency area.
After a collapse in investor confidence, Greece faces major strains in raising new money on international markets and is under intense pressure from EU authorities to get its public finances back in order.
If the experts say the programme is not enough, a meeting of EU finance ministers could demand even harsher corrective action at a meeting on March 16.
The semi-state Athens News Agency said today that the mission had raised 'key objections' to Greek income forecasts. If austerity measures failed to bear fruit then additional policies to raise €3.6 billion to €4.8 billion would be necessary, the report cited mission members as saying.
The Greek authorities have also come under fire over a currency swap arranged with US-based investment bank Goldman Sachs that allegedly enabled Athens to obscure debt almost a decade ago.
Meanwhile the government digested the impact of a general strike yesterday in which tens of thousands of people took to the streets of major Greek cities to protest tax hikes and benefit cuts.
Under pressure from financial markets and EU institutions and partners, Greece has promised a programme to cut public spending and crimp public sector pay, to raise taxes and fight tax evasion, and to restructure its economy.
The target is to cut back an annual public deficit by four percentage points of gross domestic product to 8.7% this year.
This is widely considered to be an enormous undertaking particularly since credit rating agency Moody's has calculated that Greece will have to use 15.1% of its tax revenues this year to meet debt interest payments due. That is about twice the ratio in other debt-stricken euro zone countries Spain and Portugal.
Fed reviews Goldman Sachs on Greece finance
The US Federal Reserve is reviewing financing deals conducted by Goldman Sachs and others related to Greece's debt crisis, Fed chief Ben Bernanke said today.
'We are looking into a number of questions related to Goldman Sachs and other companies and their derivatives arrangements with Greece,' Bernanke said during his second day of testimony to Congress.
Asked whether the central bank chief believes there should be limits on the use of credit default swaps to prevent the intentional creation of runs against governments, Bernanke indicated the Fed was reviewing 'this issue as well'.
