NEWS

Eurostat nearly doubles deficit

Following a partial revision of key economic data submitted by Greece, the European Union statistics service said yesterday that the budget deficit for 2003 was nearly twice as big as initially stated. At 3.2 percent of gross domestic product, the provisional deficit announced by Eurostat was over the 3 percent ceiling envisaged by the Stability and Growth Pact which governs the 12-state eurozone that Greece joined in 2001. Just before the March 7 parliamentary elections, the previous, Socialist government had announced a deficit of just 1.7 percent. Eurostat also marginally upped the public debt, from 102.4 to 103 percent of GDP. «This new data follows revisions of primary data by the Greek authorities and bilateral discussions between Eurostat and the Greek authorities held recently in Athens,» a Eurostat statement said. «Eurostat is not yet in a position to fully certify the data for 2003, and possibly for previous years. Therefore, the figures represent a partial revision of Greek debt and deficit data for 2003.» This blurry image is due to government’s underestimation of military spending, and a lack of reliable information for recent years concerning the surplus forecast for social security funds, Eurostat said. For the time being, the European Commission is not expected to issue any admonishment over Greece’s breach of the 3 percent ceiling. However, this is expected to happen over the next few weeks or even months. Eurostat attributed the deficit increase to a downward revision of tax revenue estimates and EU structural fund inflows, as well as the reclassification of a payment from the Postal Savings Bank to the government.