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Greek FinMin denies talk of debt review break-down
Greek finance chief denies reports that debt review pause was due to break-down in talks
By The Associated Press

ATHENS, Greece (AP) ' Greece's finance minister rejects reports that the country's international debt review has been suspended due to a break-down in talks, saying the pause was scheduled.

Evangelos Venizelos said at a press conference on Friday that the talks will resume in a couple of weeks' time.

Venizelos says the country is in a deeper recession than originally forecast. He estimates the economic contraction will be "very close" to 5 percent this year.



THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

ATHENS, Greece (AP) ' International debt inspectors have paused their review of Greece's austerity reforms, a finance ministry official said Friday, but denied media reports of a severe disagreement between the two sides.

Inspectors from the International Monetary Fund, the European Commission and the European Central Bank, known as the troika, have been in Athens since early this week to check on the pace of economic reforms for Greece to meet the targets set out in an international bailout agreement. A technical group from the three has been in the country for about two weeks.

The ministry official said the troika was pressing for faster reforms "and they are right," but that there was no severe disagreement which had led the troika to suspend talks, as reported in local media.

The official said the debt inspectors had asked to see the government's draft 2012 budget, but as this would not be completed until next week, talks would resume in about 10 days' time.

He said that while there was a difference in the economic estimates of the government and the troika, talks had been held in "a very good climate."

The official spoke on condition of anonymity pending a news conference by Finance Minister Evangelos Venizelos later Friday morning.

Greece has been struggling to meet its targets, particularly those for revenue, with tax collection falling short both through difficulties in stamping out tax evasion and because cash-strapped consumers have been spending less.

Venizelos has also admitted the recession this year will be worse than originally estimated, with the economy likely to shrink by more than 4.5 percent. That in turn will affect the country's ability to meet its deficit reduction targets.

Greece relies on funds from international bailout loans, with a euro110 billion ($157 billion) package being disbursed in doses since May 2010. A second euro109 billion package was agreed upon on June 21.

The suspension in the debt talks came the morning after the head of a parliamentary panel appointed to assess progress on Greece's reforms resigned following a dispute with the finance ministry. The panel had issueda report which was critical of the government's progress.

The report, published Wednesday, warned Greece would likely miss 2011 budget targets because of months of austerity delays by the government and sluggish tax collection.

Venizelos criticized the document as lacking "validity" and argued that members of the panel ' known as the State Budget Office ' had yet to acquire the "knowledge, experience and responsibility" required for the job.

The head of the panel, Stella Balfousia, resigned Thursday following Venizelos' statement.


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