Revised figures worrying Athens

The deficit for 2009 will come to 15.4 percent of the country’s gross domestic product, as the figures Eurostat will announce this Friday are set to show, forcing the government to start considering ways of covering a revision for this year’s deficit as well. The European statistics authority will publish the revised figures for the levels of debt and deficit of all eurozone member states for the 2006-09 period, and will reportedly reveal that the Greek state debt for last year actually came to 127 percent of GDP. The original estimates had suggested that last year’s budget deficit stood at 13.8 percent of GDP, the figure on which the first draft of the 2011 budget is based. The debt was also seen coming to 115.4 percent of GDP. The general secretary at the Finance Ministry, Dimitris Georgakopoulos, suggested yesterday that the 2009 deficit may eventually close at 16 percent of GDP. In absolute numbers, the Eurostat revision adds 3.7 billion euros to the deficit and 28.8 billion euros to the debt. This development is due to two factors: the incorporation of the financial figures of state companies to those of the central government and acknowledgment of the swap agreements Greece has signed in recent years. Last week, the Finance Ministry announced that the deficit of the 11 state companies with the worst losses came to 1.7 billion euros last year, while their accumulated debt amounted to 13 billion. This year’s figures are similar, taking the 2010 deficit 0.5 to 0.8 percent higher than the target set for a decline to 7.8 percent of GDP. It is quite possible as well that the government will announce fresh measures in an effort to contain the deficits of state companies as a message about putting the greater public sector in order. The first measure on the list will be the curtailment of spending by the Public Investment Program. Sources at the Finance Ministry have suggested there is a margin for cuts of 800 million euros, or 0.33 percent of GDP. Any further cuts in the program could be decided during the next visit to Athens by representatives of Greece’s international creditors on November 15. The course of state revenues will also play a part. The debt increase has now created more worries, because if it soars to 127.6 percent of GDP for last year, it will come to around 160 percent of GDP in 2013. That would make an extension to the repayment period for the 110-billion-euro loan package a must.

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