George Alogoskoufis, Greece's finance minister, yesterday signalled that his country was finally complying with European budgetary rules and that next year's budget deficit would fall to 2.8 per cent of gross domestic product.

Presenting the 2006 budget, Mr Alogoskoufis said this year's deficit would be slashed from 6.6 per cent - a result of overspending on the Athens Olympics and on defence - down to 3.6 per cent of GDP.