ECONOMY

On course for target

BRUSSELS – Greece is on track to cut its budget deficit to within European Union limits this year, a draft report by the European Commission showed yesterday. Greece has had budget deficits above the EU ceiling of 3 percent of gross domestic product since 2000 and could face fines if it does not bring the gap to below 3 percent this year. The report, obtained by Reuters, also says the Greek debt-to-GDP ratio, the highest in the EU, seems to be «sufficiently diminishing,» despite the government’s forecast being «somewhat optimistic.» «Based on current information, conditional on the figures for actual deficits currently available, Greece appears broadly on track to correct its excessive deficit by the 2006 deadline set by the Council (of EU finance ministers),» said the draft report, to be formally adopted on Wednesday. Greece plans to reduce its budget gap to 2.6 percent of GDP this year from 4.3 percent in 2005 and 6.6 percent in 2004. The shortfall is to shrink further to 2.3 percent in 2007. But the Commission said Greece, which has twice previously revised its deficit upward, still had some statistical issues to clear with the EU statistics office Eurostat, which could lead to yet another upward revision of past figures. The issues, concerning overestimation of social security and local government surpluses, could have carry-over effects in 2006 and beyond, the Commission said. Cutting the budget deficit to 2.6 percent of GDP this year hinged on one-off revenues of 0.6 percent of GDP, which were still subject to Eurostat’s approval as eligible deficit-cutting measures, the draft report said.