WRAPUP 3–EU says Greek budget plan achievable but risky

* Almunia says EU backs Greek fiscal measures

* Warns there are risks, monitoring will be tough

* Greek manufacturing slows, markets calmer

* Govt must sell drastic measures to recession-hit public

(Updates bond yield spreads, adds statistics report)

By Jan Strupczewski and Silvia Aloisi

BRUSSELS/ATHENS, Feb 1 (BestGrowthStock) – Greece’s deficit-cutting
plan is ambitious but achievable, the EU economic and monetary
affairs commissioner said on Monday, warning however that Athens
may have to take extra measures to shore up its finances.

The remarks by Joaquin Almunia came as a key economic
indicator showed Greece’s factory sector shrinking faster in
January while major euro zone partners thrived — a grim
backdrop for a country desperate to fix its spiralling debt.

The European Commission is due to publish recommendations on
Wednesday on Greece’s austerity plan to slash a double-digit
budget deficit and restore investor confidence after the country
took a pounding in the markets for weeks.

Greece’s financial problems have also sparked fears of a
spill-over effect on other weak, heavily-indebted countries in
the euro zone, and talk about a possible bailout by the EU —
although German’s finance minister said on Monday Athens must
correct its past mistakes itself.
“What we are saying to the Greek authorities is: your
stability programme has established ambitious targets and
objectives and we fully endorse these ambitious objectives,”
Almunia said in comments exclusive to Reuters.

“We consider that the achievement of these objectives in the
coming three years, before the end of 2012, is absolutely
necessary. These objectives are achievable but they are
surrounded by risks.”

Almunia said the EU would thoroughly monitor Greece’s
progress, and would demand additional measures if needed.

“We will not accept slippages on the path to the targets,”
he said. “Every time we see slippages, because some risks
materialise, we will ask for additional measures to correct
these slippages.”

Analysts say the socialist government must act quickly,
while it still enjoys solid support from a public opinion
willing to pay a price if the measures are seen as fair.

Stock Market Money

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WRAPUP 3–EU says Greek budget plan achievable but risky