Greece to escape with warning

Greece is set to escape the embarrassment of being hauled before the European Court over its faulty budgets because of the current government’s cooperation and the acknowledgment that the country’s statisticians lacked the necessary technical know-how, a source told Kathimerini yesterday. The European Commission will send Athens a warning letter tomorrow, admonishing it for the inaccurate budget data it provided between 1997 and 2003. The inaccurate figures led to the recent revision of public finances and the ratcheting up of the deficit. As a result, Greece broke through the 3 percent of GDP limit set by the Stability and Growth Pact for eurozone members. Although the warning will signal the launch of disciplinary action, there are enough mitigating factors to prevent the implementation of penalties or sanctions, EU sources say. In its report, the Commission will indicate that Costas Karamanlis’s government has cooperated closely with Brussels. It will point to the fact that the administration conducted a self-imposed audit of public finances. The report will also state that Greek officials have responded promptly to any questions that have resulted from this review. The Commission also underlines «structural weaknesses» in the recording of national accounts and a lack of technical knowledge which might explain why many EU guidelines were not enforced. As a result, it says, Greece’s National Statistics Service (NSS) made calculations which resulted in faulty figures. However, the Commission adds that in 1997, when it first became clear that there was a problem with Greek budget data, the country’s economy became the most closely monitored by EU officials of any member state. Despite this, the report claims, Greece only partially implemented the recommendations and instructions it received from Union experts. This was particularly true in the area of military procurements. The Commission claims that the PASOK government convinced Eurostat that it was recording arms purchases using an agreed formula, only to discover after this September’s audit by the Karamanlis administration that it was not the case. The report admits that Eurostat officials should have focused their efforts on the political level and not just on the number-crunchers from as early as March 2000.