Economy in an ‘unpleasant’ state

As the European Commission yesterday included Greece on a list of six EU members expected to exceed the eurozone’s public deficit ceiling in 2004, Economy Minister Giorgos Alogoskoufis complained that the new government had inherited a financial mess. «The Commission’s report confirms the fact that the previous government left behind a very unpleasant situation in public finances,» Alogoskoufis said after a meeting with Prime Minister Costas Karamanlis and Bank of Greece Governor Nicholas Garganas. «We will implement our program for growth, employment and social cohesion while taking into consideration the restrictions resulting from the current state of affairs.» Half of the 12 eurozone members – the 15 EU states, except Sweden, Britain and Denmark – were named by the Commission as projected to have deficits in excess of the stipulated ceiling set by the Stability and Growth Pact, 3 percent of gross domestic product. The countries expected to exceed the pact are Germany, France, Greece, the Netherlands, Portugal and Italy. For Greece, the Commission predicted a 3.2 percent deficit this year, and a much more respectable – and legitimate – 2.8 percent in 2005. Alogoskoufis has said he expects the deficit to close at 2.95 percent for 2003, following revised calculations. The previous government had anticipated a deficit of just 1.7 percent last year – revised up from an earlier forecast of 1.4 percent. For 2004, Alogoskoufis has said that great effort will be made to keep the deficit – forecast by the previous government at 1.2 percent – below 3 percent.

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