Eurostat gives minister ammo

The blunt criticism of recent Greek budget practices contained in an EU report made public yesterday was followed by a blistering attack from Economy and Finance Minister Giorgos Alogoskoufis on the previous PASOK government. A formal warning is expected from Brussels today. «You are responsible for running the country’s public finances off the rails,» Alogoskoufis told Socialist MPs as he presented Eurostat’s report to Parliament. The minister called for PASOK, which was in power between the years in question (1997 to 2003), to accept responsibility. «It is time you faced facts. You have led the Greek people astray and denigrated us in front of our partners,» said Alogoskoufis. The November 22 report suggests that the revisions, which took the Greek deficit above the 3 percent of GDP limit for eurozone members, «have given rise to questions about the reliability of the Greek statistics on public finances.» Eurostat suggested it had tried to rectify the problem several times, without success. «Statistical issues in the field were debated with the Greek statistical authorities far more than any other Member State,» the report said. Former PASOK Prime Minister Costas Simitis hit back, saying that the government provoked this reaction through its politically motivated and self-imposed audit. «[The audit] is an example of monumental superficiality whose overriding aim was the defamation of a political opponent and not the good of the country,» said Simitis. Eurostat identified three key areas where Greece had got its accounting wrong: the under-recording of military expenditure, the overestimation of social security funds’ surplus, and the downward revision of tax revenue estimates. However, Economic and Monetary Affairs Commissioner Joaquin Almunia is reportedly content with the cooperation Eurostat is now getting from Athens. Almunia will not seek to take the matter any further today other than issue a formal warning which will allow Greece two months to take corrective action. Athens will also be given two years to bring its deficit into line with euro regulations. The OECD, however, predicted yesterday that Greece would only manage to reduce its deficit to 3.25 percent of GDP by 2006.