EU, IMF to press Greece on austerity measures

EU and IMF officials are expected to press Greece for more austerity measures, in the backdrop of its faltering drive to bring its budget deficit under control. 

Greece was last year awarded a €110-billion rescue package by the EU and IMF. However, it has struggled to meet its deficit reduction targets, increasing the risk of a default on its €327 billion debt -- equivalent to 150 per cent of economic output.

According to European Central Bank board member Lorenzo Bini Smaghi who spoke to the Financial Times, it was a "fairytale" to think that Greece's debts could be restructured in an orderly way.

He added that one option for Greece could be to reduce its debt by selling assets and changing its tax and expenditure systems. He added that from a look at the balance sheet it could be seen that Greece was not insolvent.

However,  Socialist prime minister George Papandreou has failed win support from the opposition to adopt fresh austerity steps, more economic reforms and faster sales of state assets, as demanded by the EU and IMF.

Meanwhile, thousands of people congregated at central Athens on Sunday evening for the fifth day of protests against government austerity policies in response to an online campaign inspired by Spanish demonstrators.