Greece fell nine places, from 37th to 46th, in the global competitive rankings compiled annually by the World Economic Forum. The WEF’s «Global Competitiveness Report 2005-2006» lays the blame on the country’s budget deficit, which ballooned to 6.6 percent of GDP in 2004, partly because the previous Socialist government underestimated expenditures for Olympics-related projects and partly because the new conservative government, out of a desire to blacken its predecessor’s record, used different accounting methods to shift expenditure to that year. «Greece’s worsening performance in 2004 is linked to a significant weakening in the quality of its overall macroeconomic environment, driven by a ballooning deficit (partly linked to the Olympics) and increasing pessimism on the part of the business community about the short-term economic outlook,» the report said. Greece is the third least competitive country among EU members, outranking only Poland (51st, but up nine places) and Italy (unchanged at 47th). Representatives of the Federation of Greek Industries (SEV), which presented the report, said that the government’s plan to improve competitiveness, which it will submit to the EU on October 15, is inadequate and, with its non-quantifiable targets, does not meet EU standards. «When the goals cannot be measured, then the proposed measures are never implemented,» said SEV Chairman Odysseas Kyriakopoulos. SEV proposes measures to ensure fiscal health, reduce bureaucracy and improve education and training. The WEF’s rankings are a combination of data and interviews with about 11,000 business leaders in 117 countries. Finland topped the countries for the third year in a row. Nordic countries captured five of the top nine places (Sweden is third, Denmark fourth, Iceland seventh and Norway ninth), prompting WEF to say that they are «challenging the conventional wisdom that high taxes and large safety nets undermine competitiveness, suggesting that what is important is how well government revenues are spent, rather than the overall tax burden per se.» «The Nordic countries share a number of characteristics that make them extremely competitive, such as very healthy macroeconomic environments and public institutions that are highly transparent and efficient, with general agreement within society on the spending priorities to be met in the government budget. While the business communities in the Nordic countries point to high tax rates as a potential problem area, there is no evidence that these are adversely affecting the ability of these countries to compete effectively in world markets, or to provide to their respective populations some of the highest standards of living in the world. Indeed, the high levels of government tax revenue have delivered world-class educational establishments, an extensive safety net, and a highly motivated and skilled labor force,» said Augusto Lopez-Claros, chief economist and director of the World Economic Forum’s Global Competitiveness Program. The countries rounding up the top 10 are the United States (second), Taiwan (fifth), Singapore (sixth), Switzerland (eighth) and Australia (10th).