The European Union's executive said that Greece is «broadly on track» with budget cuts and economic reforms linked to ¤110 billion ($138 billion) in bailout loans from EU nations and the International Monetary Fund, AP reported. 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. Inflation hit 5.2 percent in June from a year ago _ the fastest rate of price increases in 13 years _ as the government hiked taxes on alcohol and tobacco and oil costs rose. Government revenues were below expectations with a 7 percent increase from one-off taxes, the EU says, but spending fell more than targeted, by almost 13 percent from a year ago. The EU warns these figures are not certain because there are no final figures for sectors where spending can easily overrun _ such as arrears in payments to hospitals and state funding to social security fund which the EU says may need a top up. Government moves to implement spending curbs _ especially crucial reforms to limit public expenditure on pensions _ by the end of the year should compensate for these slippages, it says. The report follows a June visit to Greece by European Commission, IMF and European Central Bank officials _ who will follow up with another check at the end of July that will pave the way for Greece to receive a second payment from the bailout package in early September. -- SPA
