NEWS

Eurostat to sharply revise debt

Greece’s budget deficit in 2004 will be double the government’s forecast of 1.2 percent of GDP, according to leaked figures from the EU statistics service which are due to be published at the end of March – providing a nasty surprise to whichever party wins the March 7 national elections. Furthermore, Eurostat will estimate last year’s deficit at 2 percent of the country’s gross domestic product, instead of the 1.4 percent announced by the government. For this year, the deficit is expected to rise to 2.4 percent, approaching the 3 percent eurozone ceiling. Sources quoted in yesterday’s Kathimerini said Eurostat will also question the accuracy of government figures regarding primary spending and military procurements. The same sources said officials in Brussels have already entered into extensive correspondence on the matter with the government in Athens. Primary spending – mostly on salaries and pensions – accounted for 77 percent of total spending in the 2004 budget, and is expected to reach 32.8 billion euros, up from 30.4 billion in 2003. Officials in Brussels are questioning whether total primary expenditure for 2004 will include all the bonuses, supplementary payments and salary increases scheduled for civil servants. Furthermore, spending is expected to rise abruptly in the first quarter of this year, due to the cost of the elections. On the matter of military expenditure, since 1996 Greece has embarked on a 26.4-billion-euro shopping spree. But only a small portion of this sum has been included in official budgetary figures. Instead, funds spent on weapons are entered in the budget, and included in the public debt, with great delay. From 1997 onward, Greece has been paying between 3.23 and 3.52 billion euros on an annual basis for weapons, with only a third of these sums making their way into the budget.