Deficit revision to force new austerity measures

Greeks are set to endure a further bout of austerity measures after it emerged that figures sent by Athens to the European Commission on Friday indicate that the public deficit for 2010 was about 1 percent greater than previously thought.

Sources said that the numbers conveyed by the Hellenic Statistical Authority (ELSTAT) to Eurostat, the statistical arm of the Commission, show the deficit to be 10.6 percent of gross domestic product rather than 9.5 percent. The figures are expected to be rubber-stamped by April 26.

The discrepancy in the deficit figure has been attributed to a number of things. Firstly, rather than having a 900-million-euro surplus, social security funds were found to be 500 million euros in debt.

Also, it was found that organizations in the broader public sector owed much more than previously thought. By the end of last year, more than 400 of the 1,601 total had not submitted their financial details to the central government. Another contributing factor was that the economy went through a deeper recession than initially forecast.

The readjustment of the deficit figure could not have come at a worse time for Greece as representatives from the European Commission, European Central Bank and the International Monetary Fund are due in Athens on Monday.

They are expected to demand immediate measures from the government to raise an extra 3 to 3.5 billion euros this year. Some of that money will go toward covering the discrepancy in the 2009 deficit figures.

The government will also brief the visiting creditors on how it plans to raise 23 billion euros between 2012 and 2015 through new measures and 50 billion euros by 2015 from privatizations.

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