Greece to miss deficit targets set by world lenders (VIDEO)

The Greek government has said it will not meet either its 2011 and 2012 budget deficit targets imposed by international lenders, as Athens pushes ahead with a plan to fire public-sector workers.

Ahead of a meeting of the 17 euro zone finance ministers in Luxembourg on Monday, Greece announced that its budget deficit would reach 8.5 percent of gross domestic product (GDP) this year, below the initial target of 7.6 percent, Deutsche Well reports.

DW reports: 

According to a statement issued by the Finance Ministry, Greece will manage to bring the budget deficit down to 6.8 per cent of GDP next year, but it will still miss the bailout target of 6.5 per cent of GDP.

The Finance Ministry blamed a deeper-than-expected recession, the AP reports.

The euro, meantime, dropped to an eight-month low against the dollar, Bloomberg reports.

Prime Minister George Papandreou’s administration on Sunday gave details of a 6.6 billion-euro ($8.8 billion) austerity package designed to help secure a bailout by the European Union and International Monetary Fund (IMF).

The bailout, which Greece needs to avoid running out of cash, comprises an 8 billion-euro loan payout this month and a second rescue of 109 billion euros agreed to by EU leaders on July 21.

The layoffs of Greek public sector workers is the most unpopular element of the austerity measures demanded by the so-called troika of international lenders, comprising the EU, European Central Bank and IMF.

"Important decisions which need to be taken on a European level depend first and foremost on us," Papandreou told his ministers Sunday night, Bloomberg reports. "We need to show our dedication to reaching the goals."

Fears are growing that Greece's crisis could infect the global economy. The India Times reports that the U.S. and other major economies "are showing growing signs of concern that Europe is too divided to solve the Greek problem or deal with problems in the much bigger Italian economy, and adequately re-capitalize banks that lose heavily in the event of default."

International auditors reportedly "spent the weekend trying to obtain the most accurate picture of Greece's finances and forecasts," ahead of Monday's meeting.