Greece's broken promises anger EU partners

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Greece blames a deeper-than-expected recession, fuelled by the austerity required by its lenders, for its fiscal slippages. It has reduced its public deficit from over 15 percent of GDP in 2009 to 9-9.4 percent last year but the goal of getting below 3 percent by 2014 looks remote.

The country has just entered a fifth consecutive year of recession, making it harder to bring the debt and deficit ratios down. EU/IMF inspectors say failure to open up the economy and cut down a bloated public sector are largely to blame.

In a sign of deepening mistrust, France and Germany called on Monday for Athens to place the interest on its debt into a protected account to ensure creditors get paid.

"During the last two years, many promises have been made. When you look at the result there is a big disparity. This creates a lot of mistrust," said Diego Iscaro, at IHS Global Insight. "The lack of credibility has gone worse because of the lack of progress on all the promises."

The initial targets may have been too ambitious, Iscaro said, but missing them after having agreed to them mean Greece's credibility keeps being hit, he said.

SHINING A LIGHT INTO THE SHADOW ECONOMY

Athens has made little progress so far on its commitment to slash the public workforce by 150,000 by 2015, abandoning a labor reserve plan that was meant to put 30,000 state workers on the road to redundancy last year.

Failure to staunch tax evasion is one major problem. This not only leaves holes in state coffers but also inflames a sense of injustice among salaried employees and civil servants whose taxes are deducted at source.

Ambitious targets to raise state revenues and crack down on tax cheats have been pushed back. In May last year, then Finance Minister George Papaconstantinou announced a plan to collect an extra 2.5 billion euros in 2011 from fighting tax evasion and 4.4 billion euros this year.