Greece on Monday set an ambitious 2006 budget deficit target of 2.8 percent of GDP, hoping a plan to boost revenues by debt issuance will help it to respect EU deficit limits for the first time in eight years.
Threatened with possible European Union sanctions if its finances are not brought into order, Greece plans to use debt securitisation of unpaid taxes for rapid reduction of the deficit.
"Next year's budget will be crucial. We will seek to further contain the budget deficit," Finance Minister George Alogoskoufis told a news conference.
The minister recently estimated this year's budget deficit would be 3.5 percent, itself strongly down from more than six percent in 2004.
Greece angered its EU partners and was forced to revise its budget figures since 2000 after it was revealed last year that it joined the euro zone in 2001 with a budget deficit over the 3 percent limit set by the EU.
Plugging the budget hole next year hinges on securitisation - issuing government paper on yet uncollected taxes - but it remains to be seen whether the European Commission will give its blessing.
"The securitisations are done in full compliance with EU rules and it will be a big surprise if the EU does not accept (them)," Alogoskoufis said.
If EU approval is granted, proceeds of 2 billion euros will alone help to reduce the deficit by about 1 percent of GDP in 2006.
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