ATHENS (AFP) - Greece on Thursday announced an austerity budget aiming to slash its bulging deficit by 7.4 percent of output next year, exceeding targets set under the terms of a bailout loan with the EU and IMF. The Greek finance ministry said the savings unveiled in the 2011 budget are worth 14.3 billion euros (19.4 billion dollars), compared to 8.2 billion euros agreed with the European Union and the International Monetary Fund this year. Additional deficit-cutting measures were added after the deficit figure for 2009 the starting point of Greeces arduous austerity effort was revised upwards earlier this week. The aim for the 2011 deficit is 17b euros ($23b dollars) or 7.4pc of Gross Domestic Product, meaning a five-billion-euro reduction over 2010, the ministry said in a statement. A fiscal effort of over 14 billion euros will be enforced to meet this goal through existing and new measures, the ministry added. The plan includes cuts in the badly mismanaged Greek health sector and public companies, a two-percent increase in the lower sales tax rate from 11 to 13 percent, a tax evasion crackdown, lower defense spending and a nominal pension freeze, the ministry said. Sales tax has already been raised twice in Greece this year as the Socialist government labours to implement a painful austerity programme under close watch by the European Union and the International Monetary Fund, which rescued the debt-hit country from bankruptcy with a massive loan this year. Greek civil servants, who often had higher salaries than the private sector and guaranteed job security, have already had to accept pay cuts of up to 60 percent according to the government. The austerity drive has plunged the country into a deep recession. The economy will contract by 4.2 percent this year and by a further 3.0 percent in 2011, higher than an original forecast of 2.6 percent, the finance ministry said. Under the 110-billion-euro EU-IMF rescue in May, Greece agreed that its public deficit would be reduced to 7.6 percent of Gross Domestic Product in 2011, aiming to eventually reach the EU limit of three percent. But the additional measures became necessary after the 2009 public deficit was revised upwards this week to 15.4 percent of GDP from the previous 13.6 percent by Eurostat, the EU statistics agency. The resulting effect is that the 2010 shortfall will now be 9.4 percent of output, above the 8.1 percent target. Accordingly, Athens has to find extra savings to keep its finances on track to meet the 2011 target. The revision looked likely to cost Greece some of its upcoming loan money when Austrian Finance Minister Josef Proell threatened Tuesday to withhold Viennas 190-million-euro contribution from the next EU-IMF release of 9.0 billion euros, arguing that Athens had not met its obligations. An audit of Greek finances by the EU, the IMF and the European Central Bank is currently ongoing and is expected to be completed on Monday. Provided the IMF-EU-ECB auditors give the green light, EU finance ministers would in turn approve or not giving the funds to Athens in mid-December, with the transfer of funds coming in January. The IMF is expected to disburse its 2.5-billion-euro share of the nine billion in December. Greece was forced to seek help in April when a scare over its economy turned money markets against it, forcing Athens to pay ever higher rates of return when it sought fresh financing to meet its massive debt and deficit obligations. As rates hit unsustainable levels, Greeces problems set off a debt crisis that for a time seemed to threaten the whole eurozone project, making a bailout imperative.