Greece gets a rocket from Brussels

The European Commisison yesterday gave Greece a tongue-lashing over the size of the budget deficit, complaining that the data provided for 2003 was «not satisfactory.» «The Commission concludes that Greece’s public finances show large imbalances, inconsistent with a prudent fiscal policy,» said the report adopted on the initiative of Joaquin Almunia, EU commissioner for economic and monetary affairs. «Moreover, the quality of data is not satisfactory. Deficit figures in particular remain subject to potentially significant upward revisions.» In March, just before the general election, the previous, Socialist government had announced a deficit of 1.7 percent of GDP for 2003. This was disputed by the new administration, and Eurostat inspectors confirmed the new deficit figures at 3.2 percent. The Commission report noted that Greece’s exceeding the ceiling on deficits stipulated by the Stability Pact – 3 percent of GDP – could not be blamed on unexpected factors beyond the government’s control, and came at a time of strong growth. «The excess… did not therefore result from an unusual event outside the control of the Greek authorities, nor is it the result of a severe economic downturn in the sense of the Stability and Growth Pact,» it said. The Commission attributed the high deficit to «a revenue shortfall and to higher-than-planned primary spending, including extraordinary funding, in particular related to the preparation of the Olympic Games.» The report also expressed concern at the high level of government debt and the slow pace of debt reduction. The Economic and Financial Committee will adopt an opinion on the report within two weeks. The Commission will then recommend further steps required by the excessive deficit procedure in time for the ECOFIN Council of 5 July.

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