Greek slump threatens debt plan, EU aid elusive
Greece’s economy shrank more than feared last quarter and the government on Friday sharply revised down its figures for the previous three quarters as well, increasing doubts about its ability to resolve its debt crisis.
Euro zone sources preparing for meetings of the region’s finance ministers next Monday and Tuesday said ministers would not discuss specific ways of supporting Greece.
Ministers will focus instead on pressing Athens to implement steps it has promised to cut its budget deficit, the sources said. The lack of debate on a concrete aid plan suggested European governments remained unable to decide how to stop the crisis from hurting financial markets’ faith in the euro zone. [Read the full article]
A South Dakota Senate committee on Friday grounded an attempt by Democratic gubernatorial candidate Scott Heidepriem to force the sale of state aircraft to help balance the budget.
The original bill brought by Sen. Heidepriem of Sioux Falls called on the state Department of Transportation to sell its three-plane fleet and put the proceeds into the general fund.
An amended version would have required just one of the planes to be sold, but the Senate Appropriations Committee killed the measure along party lines with four Republicans defeating it and three Democrats supporting it.
Heidepriem said there are certain needs in state government that require aircraft, “but transporting people from one meeting to another I don’t think qualifies, certainly not in a time of great fiscal peril such as we’re facing now.”
State budget director Jason Dilges said the fleet provides a tool for state government to be more efficient with its travel. [Read the full article]
FRANKFURT — With Greece overdrawn and no one eager to foot the bill, Europe’s messy debt crisis has exposed a fundamental weakness among the 16 countries that share the euro: different and often diametrically opposed approaches to spending don’t make for a happy union.
By telling Greece they stand shoulder-to-shoulder as it struggles to rein in a runaway deficit and impose severe austerity measures, but offering little more than moral support, the European Union’s biggest hitters — Germany and France — only slowed the market contagion afflicting Greece, and did not cure it.
That may brake momentum for countries like Latvia adopting the beleaguered euro. More broadly, it could force Europe, already in a winter of growing discontent, to reconsider how much of a union it really wishes to be.
European shares ended lower. [Read the full article]
A court case that extended a tax break to out-of-state companies has nudged Washington’s budget deficit to about $2.8 billion, but early signs of an economic recovery are making the state’s financial future a bit brighter.
The new deficit figure stems from Friday’s report of the state Economic and Revenue Forecast Council, which formulates the official estimate of future state tax collections. The report showed a state economy that appears to be stabilizing, with growth in state revenues returning over the next few years.
The Legislature’s Democratic majority must find a way to bridge the $2.8 billion deficit. Democrats said they plan a combination of spending cuts, tax increases and one-time fixes, such as fund transfers. With the council’s latest quarterly report in hand, budget writers will work fast.