Page last updated at 15:41 GMT, Friday, 26 February 2010

Greek budget revenues better than expected in January

Greece protests
Public outcry has been vociferous over proposed austerity measures

Greece has said its budget revenues in January exceeded its targets - rare positive news for a country in the midst of a debt crisis.

Net revenues rose at an annual rate of 16.6%, compared with a target of 10.8%, boosted by a one-off tax on big corporations.

Greece's deficit is more than four times higher than eurozone rules allow, and it is trying to reduce it.

Proposed government spending cuts have brought massive street protests.

But the figures refer to the central government deficit, not the overall government shortfall measured under eurozone rules, so they do not show the complete picture of Greece's finances.

Funding need

A finance ministry official told the Reuters news agency that Greece had not cancelled investor road shows to sell its new debt in the US and Asia.

The shows had been scheduled for the end of February or the beginning of March.

"The road shows have not been cancelled. They will take place some time later," the official said.

Greece needs to sell bonds in the coming weeks. It has to raise 20bn euros in order to pay off maturing debt in April and May.

The huge sell-off in Greek government debt over the past six months means that it has become much more expensive for the nation to borrow.

German bank demand

The crisis over Greece's huge debts has hurt the euro and raised the prospect of a bail-out by the other 15 countries that share the euro.

In another development, some German banks said they would not take on more Greek government bonds, making it harder for Greece to sell debt to pay off its debts.

Deutsche Postbank, Commerzbank unit Eurohypo and the nationalised Hypo Real Estate will not add to their holdings of Greek debt.

German banks are the third-biggest creditors of Greece after banks in France and Switzerland.

Deficit pledge

European Union rules state that no nation in the euro bloc should have an annual budget deficit which is higher than 3% of its gross domestic product.

Greece has pledged to reduce its deficit from 12.7% to 8.7% during 2010.

Its long-term deficit-cutting plan aims to reduce the budget shortfall drastically, to less than 3% by 2012.



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