EU to probe accounts

The European Union announced yesterday it was launching a probe into Greek public finances, after confirming that Greece’s public debt from 2000 on was larger than previously declared, but admitted that it was too late to reconsider its membership of the eurozone. Michel Van den Abeele, head of the EU’s statistical service, Eurostat, said the organization would soon send an investigative team to Athens to check the government’s bookkeeping for the years 1997 to 1999, the period leading up to Greece’s adoption of the euro currency. Eurostat was looking into taking legal action against Greece over the incorrect declarations, said EU Economic and Monetary Affairs Commissioner Joaquin Almunia. He stopped short of suggesting Greece’s continued use of the euro as its currency was in question. What is in question, though, is Greek reliability. «Eurostat had consistently raised questions about the quality of the Greek data in the past and the new data justifies this insistence,» said Almunia. Finance Minister Giorgos Alogoskoufis revealed on Wednesday that a self-imposed audit by the government had forced him to reassess Greece’s public debt figures for the past four years. Alogoskoufis announced the new annual figures were at least 2 percent higher. Greece joined the eurozone in 2001 and signed the Stability Pact, obliging it to keep public deficit below 3 percent of GDP. The new figures show Greece’s lowest figure as 3.7 percent in 2001 and 2002. Alogoskoufis estimates public debt, fueled by extra Olympics spending, will reach 5.3 percent this year. «The revisions are of a size and scope that is causing real worries to the Commission,» said Almunia. The new figures show Greece had the largest budget deficit of the 12 eurozone members last year. It might be of some comfort that France and Germany had overspent by 4.1 and 3.8 percent respectively. However, recalculations of Greece’s public debt were higher than previously declared and above the EU average of 70.7 percent of GDP. Greece’s debt was 109.9 percent last year. Government spokesman Theodoros Roussopoulos yesterday insisted the previous PASOK government was responsible for the mess, accusing the Socialists of «accounting alchemies.» The opposition’s spokesman, Spyros Vougias, accused the conservative government of a «lack of coordination» and of undermining Greece’s image abroad.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.