Greece's debts much worse than thought

Its 2009 budget deficit and debt levels were much higher than previously estimated, the European Union statistics agency said, making it unlikely the country will reach targets set out in its bailout agreement.

Greece's 2009 budget deficit reached 15.4 per cent of gross domestic product, significantly above its previous estimate of a 13.6 per cent deficit, Eurostat said. Public debt stood at 126.8 per cent of GDP at the end of last year, higher than that of any other EU state.

The revisions are likely to mean Greece will not achieve its initial target of lowering the deficit to 8.1 per cent of GDP by the end of this year.

Prime minister George Papandreou insisted that his government would still be able to reduce the deficit by at least 5.5 per cent by the end of the year, but he conceded the deficit revision would add pressure on his government to cut costs, and said Greece could seek an extension for repaying its rescue loans.