Alogoskoufis: Don’t be afraid of the real data

Economy and Finance Minister Giorgos Alogoskoufis said yesterday the government’s proposed upward revision of Greece’s gross domestic product (GDP) by about 25 percent – now pending approval by Brussels – will show the economy’s weaknesses but was necessary on the grounds of transparency. «The revision will highlight the weaknesses in the economy, particularly the extensive tax evasion and the problems in the public sector, but will also show that as a country we were wealthier than the old data indicated,» he told reporters after two days of meetings in Brussels with his counterparts of EU member states. Alogoskoufis said that as a result of the revision Greece’s GDP would approach the EU average and this would mean assuming higher obligations. He said Greece should not fear the transparency of statistical data. «I read articles by members of the opposition who wonder why the extent of the revision was not restricted. We consider that such issues must be depicted according to reality. They must not be the result of Procrustean methods,» he said. Alogoskoufis said the revision was in no way linked to the lifting of the regime of fiscal supervision by the EU later this year, as the resulting lower public deficit figures do not come into play. The exit from the excessive deficit procedure, he explained, will be approved on the basis of the old data – according to which the country’s public deficit has fallen below the 3 percent of GDP cap mandated by the EU. He said in future GDP revisions should be conducted every five years, to minimize accuracy problems. Alogoskoufis said the exit from EU supervision was only an interim stop on the way to achieving balanced or surplus budgets by 2012. Referring Economic Affairs Commissioner Joaquin Almunia’s prediction Tuesday that Greek household debt as a percentage of GDP would rise above the EU average in 2008, Alogoskoufis said the issue of interest rates was an exclusive concern of the European Central Bank.

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