Deficit for 2004 may be over 6 pct

Greece’s final deficit figure for 2004, which is due to be submitted to the EU within days, is likely to be at least 6 percent of GDP – almost a whole percentage point higher than the government had recently predicted – sources told Kathimerini yesterday. The latest official forecast had put the figure at 5.3 percent of GDP but, according to sources, the government is set to announce a deficit of somewhere between 6 and 6.2 percent. Representatives from the National Statistics Service (NSS) and Eurostat, the EU’s statistical arm, are said to be locked in talks in an effort to arrive at a final figure. The rise is attributed to increased government credit guarantees for public organizations, higher state hospital debts than predicted and a number of compensation dole-outs to farmers that had not previously appeared on the books. The European Commission had already estimated that Greece’s 2004 deficit may top 5.5 percent of GDP but the realization that the figure may be substantially higher will be a palpable blow, coming just days after Greece became the first EU country to have its economy officially placed under supervision due to its excessive deficit. The European Council of Finance Ministers (Ecofin) last week agreed to give the government until the end of 2006 to lower its deficit to within the eurozone limit of 3 percent of GDP. Ministers, however, also instructed Greece to submit biannual progress reports to the EU, starting this October. The government’s minimum aim is to reduce the deficit to 3.6 percent of GDP at the most by the end of the year.

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