Greece will try to accelerate fiscal reforms and reduce its swollen budget deficit to the euro-zone limit by the end of 2012, a year earlier than planned, Greek finance minister George Papaconstantinou said yesterday.

The move, which would bring the deficit down to the limit of 3 per cent of gross domestic product within three years, is aimed at rebuilding confidence on international financial markets as Greece prepares to launch a €54 billion borrowing programme this year to finance a sharply rising public debt.

“This is a clear signal of the government’s determination to press ahead quickly with reforms,” Mr Papaconstantinou said. Downgrades by three international ratings agencies pushed up spreads on 10-year Greek bonds to almost 300 basis points over their German equivalents last month amid fears of a possible default.

Although spreads continued to tighten yesterday, markets were still awaiting details of Greece’s stability and growth strategy.

The programme will be discussed with visiting EU officials later this week. (Copyright The Financial Times Limited 2010)