Eurostat revision may turn surplus into small deficit

A review of Greece’s public finances by the European Union’s statistics office may turn the country’s forecast budget surplus into a shortfall, government sources said yesterday. «Eurostat is examining the methodology behind the preparation of the budget. There are different approaches (by Eurostat) which may lead to a revision of certain government accounts,» a high-level government source told Reuters. A revision could turn this year’s estimated budget surplus of 0.4 percent of gross domestic product (GDP) into a small deficit of 0.2-0.3 percent of GDP, the source said. This could relegate Greece, which, so far, has been predicting budget surpluses for this year and next, to the back of the class, alongside the eurozone’s heavyweights Germany, France and Italy, all struggling to avoid breaching the EU Stability Pact’s deficit ceiling of 3.0 percent of GDP. «We are waiting for the completion of negotiations with Eurostat before finalizing the (2003) budget and Greece’s updated Growth and Stability program,» the source said. The daily Eleftherotypia said yesterday the scrutiny of Greece’s budget accounting practices, carried out by Eurostat, is looking into certain defense expenditures and 5.8 billion euros’ worth of state debt owed to banks that is not booked as public debt. Greece, one of the eurozone’s most indebted nations, is aiming to bring down its public debt by almost 4 percentage points next year to 99.3 percent of GDP. Helped by asset sales and a growing economy, the government estimates public debt will shrink by almost 2 percentage points this year to 144.6 billion euros or 103.2 percent of GDP. (Reuters)