ECONOMY

Deficit exceeded 4 pct last year

Economy and Finance Minister Yiannis Papathanassiou admitted yesterday that Greece’s 2008 budget deficit may have exceeded the government’s 3.7 percent of gross domestic product (GDP) estimate, as Greece expects the council of EU economy and finance ministers’ (Ecofin) decision today about the excessive deficit procedure. Papathanassiou conceded that last year’s deficit was higher than originally estimated by Athens as well as the European Commission, adding that the government will this June assess the effect of its new measures and «if we have not met our target, then there will be new measures,» he stated. The council of eurozone finance ministers [Eurogroup] issued a clear recommendation to Greece, Ireland, Spain and France that they should take measures to contain their deficit immediately. «Greece will have to take decisive measures to correct its excessive deficit,» said Eurogroup Chairman Jean-Claude Juncker, noting that Papathanassiou is aware of that. European Commissioner for Economic and Monetary Affairs Joaquin Almunia added that Greece and Ireland will have to reduce their deficit from this year, which shows that the latest measures announced for expenditures and revenues have not convinced Brussels of their ability to resolve the problem. Furthermore, the Commission is calling for interventions of a permanent character and seems to be disputing the data the Greek authorities have submitted regarding the deficit in 2008. According to the report forwarded to Eurostat by the National Statistics Service, the 2008 deficit was higher than 4 percent of GDP and is likely to come in between 4.2 and 4.4 percent of GDP. It is therefore no surprise that the informal meeting of Ecofin today is more than likely to once again begin the excessive deficit procedure for Greece, two years after its previous supervision had ended.