Greek budget deficit falls sharply

Greece's budget deficit in the first two months this year plunged more than 77 percent, the finance ministry said on Monday, as the debt-strapped country tries to put its public finances in order. Government receipts rose 13.2 percent to 8.75 billion euros (12 billion dollars) while spending was cut 9.6 percent to 8.99 billion euros, leaving a public deficit of 904 million euros compared with the year-earlier 3.99 billion euros shortfall.
The finance ministry noted that under a drastic recovery plan already submitted to the EU, Greece was supposed to increase revenues by 11.7 percent and cut spending by 3.5 percent during the two-month period. It said the increase in tax revenue largely came from an exceptional additional levy on large companies' 2008 earnings, higher consumption taxes and an increase in Value Added Tax on fuel, tobacco and alcohol. On the spending side, the government reduced social welfare, its own operating expenses and consumption while public investment was slashed by more than half.