EC praises Greek effort to cut deficit

After months of stiff criticism from Brussels, the government was applauded yesterday as the European Commission approved the plan to reduce Greece’s towering deficit as set out in its revised Stability and Growth program. «The Greek government must be praised, not only for implementing the 2005 budget with rigor, but also for announcing additional measures for this year. Taking into account the existing risks, I welcome its commitment to present a budget for 2006 in which the deficit would be brought below 3 percent of GDP,» said European Commissioner for Economic and Monetary Affairs Joaquin Almunia. The revised Stability and Growth program included last week’s indirect tax rises and aims to reduce the deficit from 6.1 percent of GDP in 2004 to 2.9 percent by the end of next year. The Commission, however, expressed some doubts about the government’s calculations, saying that some of the official revenue and expenditure projections appeared optimistic and could lead to the deficit turning out higher than predicted. The Commission also called on Greece yesterday to take steps to ensure the sustainability of public finances and to work more closely with Eurostat to improve the collection and processing of government data. Greece revised its deficit figures for the years between 1997 and 2004 upward after the conservative government initiated an audit of public finances when it came into power last March. Despite the positive response from the Commission, Greece’s Stability and Growth program has yet to be given the green light by the European Council of Finance Ministers (Ecofin). Ministers are due to meet on Tuesday to issue their verdict. In February, Ecofin agreed to give the government until the end of 2006 to lower its deficit to within the eurozone limit of 3 percent of GDP but also instructed Greece to submit biannual progress reports to Brussels, beginning this October. During a heated exchange in Parliament yesterday, PASOK leader George Papandreou accused the government of unnecessarily bringing Greece under the watch of the EU and turning the country into «voluntary guinea pig» for the EU, while Economy and Finance Minister Giorgos Alogoskoufis responded by charging the Socialists with hiding the truth when they were in power.

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.