Greece approves austerity measures

3 October 2011

The government in Greece has passed a series of austerity measures in a bid to reduce the 2012 deficit to 6.8 per cent of gross domestic product.

A new budget has been passed - supported by international creditors - by the ruling party as steps are taken to secure an aid payout in the region of €8 billion ($10.7 billion), Bloomberg reports.

The deal includes larger deficits than previously anticipated, while the 6.8 per cent forecast misses the 6.5 per cent target previously drawn up by the European Union, European Central Bank - which is the central bank for the euro, Europe's single currency - and the International Monetary Fund.

This agreement is known as the troika and Geoffrey Yu, a currency strategist at UBS AG, said the latest deficit numbers "should not derail Greece's current negotiations with the troika. We remain of the view that Greece will ultimately receive its current bailout tranche".

By Gary Cooper

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