(Reuters) - Greece will have to slash a further 5.5 percent of GDP in government spending in 2013 and 2014 to meet agreed fiscal targets underpinning the second international bailout for Athens, a European Commission report said.
The Compliance Report by the European Union's executive describes the progress of Greek reforms necessary for the release of new euro zone money to Athens and recommends the first disbursement be made as soon as possible.
The report, obtained by Reuters, said a package of savings adopted by Greece in early 2012 worth 1.5 percent of gross domestic product should allow Athens to meet the target of bringing the primary deficit down to 1 percent this year.
"However, current projections reveal large fiscal gaps in 2013-14," the Commission report said, adding that the shortfall for the two years totaled 5.5 percent.
"Therefore, substantial additional expenditure cuts will have to be announced and adopted by Greece in the coming months, in particular when Greece updates its medium-term budget in May 2012," the report said. Read More