Almunia urges Greece to persevere with solid fiscal stabilization measures

European Commissioner for Economic and Monetary Affairs Joaquin Almunia said yesterday the Greek government ought to persevere with the drive for fiscal rehabilitation through permanent structural measures and avoid those of «one-off character.» «The Greek authorities are facing two basic challenges: the high external trade deficit and the level of public debt, which is the highest among the 25 member states… I would be averse to measures of one-off character for achieving fiscal stabilization,» he told Greek reporters in Brussels, ahead of his arrival in Athens today to attend a two-day meeting of the European Central Bank board of governors. Almunia noted that despite the expected downturn after the boost of the Olympic Games, the Greek economy has maintained its strong growth rate – more than 3 percent, which is higher than the EU and eurozone averages. «The government needs to promote reforms and strategies with a view to maintaining at high levels the growth rate of the Greek economy in coming years,» he added. Almunia said that before the end of the year, the Commission will evaluate the measures which the Greek government has adopted in order to bring the fiscal deficit down to 3.6 percent of gross domestic product (GDP) this year and below the prescribed 3 percent in 2006. Almunia added that the Commission is waiting until the end of October, as agreed, for a government report on the measures, its forecasts for 2005 and a briefing on the draft 2006 budget, which was unveiled on Monday. The Commission last week revised the final figure of Greece’s fiscal deficit for 2004 from the government’s 6.4 to 6.6 percent. Economy Minister Giorgos Alogoskoufis said the government hopes to meet this year’s target of 3.6 percent largely through the securitization of overdue tax debts, for which it has also asked the Commission’s approval. On Monday he said the plan complied with EU rules and it would be a big surprise if they weren’t approved. Almunia said he is not in a position to comment on the securitization plan, in view of the fact that Eurostat, the EU’s statistical service, has asked the government for further details before ruling on the subject. Main opposition PASOK party leader George Papandreou said in Parliament yesterday that the plan, on which the success of this year’s fiscal policy hinges, at the moment is worth no more than the paper it is written on.