ECONOMY

Greece OKs lower GDP revision

BRUSSELS – The European Commission yesterday expressed satisfaction with the agreement reached between Eurostat and the National Statistics Service (NSS) on the revision of the Greek gross domestic product (GDP) since 2000, but expressed misgivings about the attainment of some 2008 Greek budget targets. Speaking at the end of the eurozone finance ministers’ council (Ecofin) session late on Monday, Economic and Monetary Affairs Commissioner Joaquin Almunia said the agreement had been the product of «excellent cooperation» between the two statistical agencies and there had been no political interventions on an issue of «technical nature.» The remark referred to the gap of more than 15 percent between the original upward revision of 25.7 percent applied for by the NSS and the one approved by Eurostat of 9.6 percent. On his part, Economy and Finance Minister Giorgos Alogoskoufis welcomed the fact that the NSS and Eurostat had agreed on the final figure, despite the large gap. He concurred with Almunia that the issue was of a technical nature and said he had instructed the NSS to cooperate closely with Eurostat on future revisions, which, he said, should take place every five years, as required. Different assessment However, despite the evident desire of both sides to downplay the issue, NSS and Finance Ministry officials who handled the revision yesterday insisted that the methodology used had been correct. They said minor problems in NSS calculations could not alone account for the large divergence of figures, and hinted that Eurostat likely did not want to be seen to approve a large revision that had been viewed with suspicion and critically by the international press when it was first announced. «We are talking about a different assessment, the numbers are not in dispute. We shall respect Eurostat’s decisions,» said government spokesman Theodoros Roussopoulos. Greece will now have to contribute only about -750-800 million in retroactive contributions to the EU budget, instead of about 2.6 billion had the NSS figure been adopted in its entirety. At Monday’s Ecofin session, Alogoskoufis presented the Greek 2008 draft budget, which envisages bringing down the fiscal deficit to 1.7 percent of GDP from a projected 2.6 percent this year, and its gradual elimination by 2010. Almunia described the budget as ambitious, adding that its successful execution would require «great» effort. Responding yesterday, Alogoskoufis said, «The government and myself are committed to adopting the right measures to attain the target set.» He said the government’s foremost goal was to bring down tax evasion and enlarge the taxation base. The government is pursuing a second wave of economic reforms, with further privatizations, increased use of private-public partnerships in order to lighten the burden on the budget, incentives for new entrepreneurs and a simplification of the tax system.