Juncker says Greece must cut deficit sharply in 2010

Greece must cut its budget deficit by 4 percentage points this year and if it doesn’t, additional measures could be called for, Eurogroup chairman Jean-Claude Juncker said on Monday.

“We will have a discussion on the basis of what the European Council agreed upon… Greece has to make sure that it cuts it budget deficit for 2010 by 4 percent and we have to check if this is possible or not, and it will all depend on the answers given to that crucial question,” he told reporters as he arrived for a meeting of euro zone finance ministers in Brussels. [Read the full article]

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China could be about to allow its currency to strengthen by as much as 5 percent to slow down the country’s fast-growing economy, Goldman Sachs’ (NYSE:GS – News) chief economist was quoted as saying on Sunday.

“I have a strong opinion that they’re close to moving the exchange rate,” Jim O’Neill told Bloomberg. “Something’s brewing. It could happen anytime.”

The news service said O’Neill believes China may allow the yuan to rise as much as 5 percent in a one-time revaluation and to then trade within a bigger band or against a larger basket of currencies.

“They need to do something to slow the economy down and deal with the inflation consequences,” he was quoted as saying. O’Neill believes China’s economy is growing between 12 percent and 14 percent, Bloomberg said.

The World Bank has forecast China’s economy will grow 9 percent this year, faster than global growth of 2.7 percent. Beijing said it expanded by 8.7 percent in 2009. [Read the full article]

An announcement of concrete steps that the euro zone could take if necessary to help Greece would calm markets now attacking the country, Greek Finance Minister George Papaconstantinou said on Monday. “If we announce new measures today, will that stop markets attacking Greece? My guess is what will stop markets attacking Greece is a further, more explict message that makes operational what has been decided last Thursday at the European Council,” he said. EU leaders said in a statement on Thursday the euro zone would act in a determined and coordinated way to safeguard the financial stability of the single currency area if there was such a need, but did not give any details on how it could be done, which disappointed financial markets. [Read the full article]

Greece is seeking political not economic support from the European Union and the international community because it can solve its problems itself, a Russian news agency quoted the Greek Prime Minister as saying on Monday. “Greece has not appealed either to the international community or to the European Union for financial aid. Greece intends to and can solve its problems itself,” premier George Papandreou told Russian state-owned news agency RIA in an interview ahead of his visit to Moscow. “What we want to see, and are beginning to witness to a large extent, is political support from European countries and their firm commitment to our (European) unity,” he added. (Reporting by Dmitry Zhdannikov, Editing by Michael Stott) MARJAH, Afghanistan (Reuters) – U.S. [Read the full article]

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