Defense expenses well hidden

Economy and Finance Minister Giorgos Alogoskoufis claimed yesterday that the previous government had misused its own preferred method of listing defense expenses and that it was not the government’s adoption of another method that had pushed the deficits of previous years above the limits deemed acceptable by the European Union. To provide an example, Alogoskoufis referred to fiscal year 2003, when the government had declared that it had obtained defense equipment worth 774 million euros. In reality, he said, the systems received were worth 2.116 billion euros and payments worth 2.116 billion were made. The extra amount did not appear in the budget. The simmering row between the conservative government and the Socialist opposition erupted again on Tuesday following remarks by Minchel Vanden Abeele, head of EU statistics agency Eurostat. Responding to a question by Greek Socialist Euro MP Katerina Batzeli, Vanden Abeele had said that Eurostat’s preferred method of listing defense expenditure was to list it at the time of delivery, rather than during payment. This was the method the previous government had adopted and agreed to by Eurostat in 2002. Several other EU countries also follow the method. The Eurostat chief laid the responsibility for producing accurate budget data squarely at the door of national statistical offices. He said his institution could only ask if EU member states were following the appropriate methodology in calculating the budget data and express reservations. «If we want to go further in our audit we may need more legal powers,» he said in a hearing before the European Parliament’s Economic and Monetary Affairs Committee. He also pressed for more staff: «It is possible to do more in this area but that will require human resources, which we are short of.» At a minimum, Brussels can give the current batch of Greek budget figures a clean bill of health: «We can now be certain the figures are correct,» Vanden Abeele said. Alogoskoufis accused opposition MPs of deliberately distorting Vanden Abeele’s statement to suit their own purposes. In any case, Eurostat, as Vanden Abeele said, has accepted the revised figures and the new method of listing defense expenditure. However, the revision has prompted Eurostat officials to look into the Greek budgets before 2000 to see whether Greece’s entry into the eurozone, accepted formally in June 2000, was based on similarly under-reported deficits. Previous budgets OK Government officials say privately that they have already done their own audit for the 1999 budget and that the deficit is within the prescribed limits. In any case, they claim, the Eurostat experts’ visit to Athens will last only 24 hours, ensuring that no detailing auditing of books will be made.