ECONOMY

Deficit confirmed at 3.5 pct

Greece’s budget deficit last year reached 3.5 percent of gross domestic product (GDP), the only eurozone member to exceed the European Union’s 3 percent limit, Eurostat said yesterday. The European Commission’s statistical service revised higher Greece’s previous 2.8 percent deficit estimate due to «updated data for taxes, hospitals, social security.» The Commission said last month that if Eurostat confirmed the higher deficit figure, then it could reopen disciplinary procedures against Athens. Under EU fiscal rules, governments must keep the deficit to below a ceiling of 3 percent of GDP. The Commission added, however, that the procedure may be dropped if it can forecast the 2008 and 2009 Greek deficits coming in at below 3 percent. The latest Eurostat figure for the 2007 Greek deficit is also higher than the revised 3.4 percent unveiled by National Economy and Finance Minister Giorgos Alogoskoufis earlier this month. The Greek government announced in August a series of measures aimed at increasing budget revenues by some 400 million euros a year, including introducing taxes on share capital gains and stock dividends. Among the EU’s 27 members, Hungary was the worst offender with a deficit reaching 5 percent of GDP in 2007. Eurostat data showed that Greece’s public debt figure reached 94.8 percent of GDP in 2007, the second highest in the EU after Italy. Total government debt for the EU’s 27 member states fell to 58.7 percent of GDP in 2007 from 61.3 percent of GDP in 2006.