Eurostat finds new budget hole

The latest audit on Greek government accounts by Eurostat, the European Union?s statistical service, has uncovered a new fiscal hole in the country?s social security funds.

Eurostat officials, which have been in Athens since last week, found a 500 million euro deficit in the country?s pension funds, rather than 900 million euro surplus, as declared by Greek authorities.

If the findings from the audit – which has yet to be completed – are confirmed then it is possible that Greece?s budget deficit may exceed the ten percent of gross domestic product for 2010.

This in turn could mean that the government will be forced to introduce further belt tightening measures in an economy that was shrinking at an annual pace of 6.6 percent in the last quarter of 2010.

Figures on Greece?s 2010 government accounts are expected to be finalised on Thursday.

Representatives from the International Monetary Fund, European Commission and European Central Bank – collectively known as the troika – will make a final decision on the possibility of further measures being needed during a visit to Athens next week.

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