Deficit recalculation

Greece has revised upward, by at least 2 percent, the annual public deficit figures it submitted to the EU since 2000, Finance Minister Giorgos Alogoskoufis announced yesterday, causing a European finance chief to label the revelation «an enormous problem.» The government had already estimated the public deficit would reach 5.3 percent of GDP this year, well above the eurozone limit of 3 percent. The previous PASOK government had predicted it would be 1.2 percent. However, Alogoskoufis’s announcement yesterday confirmed Tuesday’s allegations in some European newspapers that Greece’s declarations for recent years were lower than they should have been. The new figures provoked concern within the EU. «It’s a real problem, an enormous problem. We must be assured that the statistics furnished are exact and pertinent,» European Central Bank President Jean-Claude Trichet said yesterday. Trichet suggested the creation of independent bodies to act as conduits between member states and the EU to ensure reliable declarations. After receiving the results of an audit, instigated by his government, Alogoskoufis said the figure of 2.0 percent, submitted for 2000, should have been 4.1 percent. For 2001, it should have been 3.7 instead of 1.4, the same for 2002, and in 2003, it should have been 4.6 instead of 1.7. Government spokesman Theodoros Roussopoulos said the new figures would not affect Greece’s membership in the eurozone. Alogoskoufis said he was not accusing anyone of cheating or purposely making false declarations, but blamed PASOK’s finance ministers, Yiannos Papantoniou and Nikos Christodoulakis, for the miscalculation. Alogoskoufis said the Socialists had wrongly assessed social security funds as well as providing imprecise figures on defense spending, including omitting the purchase of 45 fighter jets. «We were insistent from the start of the government’s tenure that a non-transparent audit would result in the defamation of our country,» said PASOK leader George Papandreou. Christodoulakis claimed the government was «rewriting history» in order to cover up its lack of policies, while Papantoniou said the audit had been conducted in secret, «in the corridors of government.» He also claimed that PASOK had an understanding with Eurostat as to how to incorporate military spending into the government accounts.

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