EU: Greece broadly on track with budget cuts

July 7, 2010 8:39:47 AM PDT
The European Union's executive says Greece is "broadly on track" with budget cuts and economic reforms linked to euro 110 billion ($138 billion) in bailout loans from EU nations and the International Monetary Fund.

A Wednesday report by the EU says Greek efforts are "positive" but warned there a number of areas where Greece could run into trouble.

It says inflation is "markedly higher" than the government expects, partly because there is little market competition and major suppliers are easily able to pass on indirect tax increases to customers.

Government revenues were below expectations, it says, but spending fell below a target. It warns these figures are not certain because there are no final figures for sectors where spending can easily overrun - such as health care.