EU takes Athens to task

The European Commission will release a report on the Greek economy tomorrow that is expected to sound the alarm over the dangers inherent in a number of problems, including the lack of real development, the shortcomings of the education system and the failure to introduce structural reforms that would increase competitiveness. The report will mention uncontrolled spending, ballooning deficits, massive debt and the threat of the social security system’s bankruptcy because of its continually growing costs. In addition to the problems of the education system, which has not met the needs of the labor market, the report will note the stagnation bureaucratic tangles impose on businesses, and the inability of productive forces to adapt to new technologies. The high growth rate displayed by Greece over the past years, the highest in the EU, is only one aspect of an economy which, the report will note, «did not exploit fully the beneficial conditions to deal with two basic structural problems: the lack of competitiveness and fiscal imbalances.» It will forecast that the «higher-than-expected» cost of the Olympic Games, in conjunction with the so-called «social package,» will intensify pressure on public finances. The report will note that primary surplusses have disappeared because of uncontrolled primary spending. Spending on wages and social measures consistently exceed those in budget forecasts. It will predict that the end of the Olympic Games will release funds equal to about 1 percent of GDP, which should go toward trimming deficits. The report will also lament the fact that the government abandoned the effort to reform the social security system, stressing that the changes that were made did not take into account the magnitude of the public debt, placing the social security system in great danger if additional measures are not taken. It will note that no further measures are planned to reduce the social security and pension system’s cost. Meanwhile, the 2003 budget deficit is estimated to have doubled in the January-November period, year-on-year, sources told Kathimerini. Figures, which should have been released officially at the end of last month, are said to have been swelled by higher spending in view of the March 7 election.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.