EU ratchets Greek deficit figures up

The European Union yesterday said it has revised the deficit figures Greece submitted in recent years amid accusations from a German newspaper that the Greek deficit had repeatedly breached the limit of 3 percent of GDP, set by the EU as a condition for being part of the eurozone. Greece had submitted deficit figures that were around 2 percent lower than they should have been for the years 2000, 2001 and 2002 in order to cover up the fact that it was not within the eurozone limit, the Sueddeutsche Zeitung claimed yesterday. Gerassimos Thomas, spokesman for the EU’s executive Commission, which acts as a financial watchdog, said the Eurostat statistics office would release the latest deficit and debt figures later this week or early next week and would not comment on whether Greece was indeed over the limit. However, he did confirm that Greece’s declared figures for the period in question had been revised. Thomas refused to be drawn on what repercussions Greece might face if the Sueddeutsche Zeitung’s accusations turn out to be true. «We have not come across any case where a state gives deliberately false figures,» said Thomas. Agence France-Presse reported that an EU source told the agency that Greece’s euro accession figures of 1998 and 1999 were not being re-examined but there could be substantial revisions for later years, caused by defense expenditure and a much smaller-than-expected social security surplus. Greece has already admitted to exceeding the terms of the eurozone’s Stability and Growth Pact by incurring a deficit of 4.6 percent in 2003, which it claims was mostly brought on by extra spending for the Olympics. However, Finance Minister Giorgos Alogoskoufis has announced that the government’s goal is to reduce the deficit to 2.8 percent in 2005. Premier Costas Karamanlis has blamed the previous, PASOK government for making false deficit predictions while knowing the figure was much higher, an allegation the Socialists reject. During his Thessaloniki speech last Saturday, Karamanlis said the deficit would reach 5.3 percent in 2004, compared to PASOK’s estimate of 1.2 percent.

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