Greece urges deficit ‘flexibility’

Athens expressed support for Germany and France yesterday in their dispute with Brussels over eurozone budgetary spending ceilings, while at the same time urging a compromise solution, as the specter of Greece finding itself in a similar predicament begins to loom. «Since last week, our country has been trying to attain a compromise in the belief that, at this point, there is no need for a confrontation,» Prime Minister Costas Simitis said at a conference in Thessaloniki on Greece’s 550-million-euro Balkan economic reconstruction package. «We have proposed a possible solution under which the current situation would come under observation and everyone would endeavor to ensure that treaties are implemented, without any need for further measures.» EU ministers of finance (ECOFIN) met until late yesterday to discuss whether spending by the bloc’s two powerhouses should be squeezed back under the limit of 3 percent of GDP envisaged by the Stability Pact. The session will resume today. Simitis, who spoke with Chancellor Gerhard Schroeder, said Germany «has arguments against the immediate implementation of any measures, due to the particular developments that took place in the country.» Economy Minister Nikos Christodoulakis said a solution could be provided by interpreting the regulations «with flexibility, in the sense of taking into account the economic and political realities of each member state.» Underlying both men’s statements were fears Greece’s economy might also come under unwelcome scrutiny from Brussels. Greece’s own budgetary deficit is accompanied by high growth levels – as opposed to low growth in France and Germany – while the public debt remains uncomfortably high, at over 100 percent of GDP.