Greece

New government begins work

Article published on the 2009-10-19 Latest update 2009-10-19 12:06 TU

Greece's Prime Minister George Papandreou speaking to the media earlier this month
(Photo: Reuters)

The new government in Greece which was sworn-in late last night survived a vote of confidence in the 300-seat parliament by 160 votes to 140. The new socialist government has a huge task in sorting out the country's finances but the central bank says there's hope on the horizon.

The Greek central bank said today that the deficit in the Greek current account was stable in August compared with the same month last year. It said the current account, which measures trade in goods and services in addition to certain financial transfers, came to 424,7 million euros against 414,8 million in August 2008.

The new Prime Minister George Papandreou on Friday described the country's finances as being in a state of emergency. He pledged to restore Greece's ailing economy with a stimulus package and said that the deficit required urgent reforms and state cost cuts.

The previous conservative administration had insisted that the deficit stood at six per cent of output - still double the level allowed by the European Union - but the Bank of Greece says the real gap is closer to 10 per cent.

Greece is also on the brink of recession after years of around four per cent growth.