Government accounting denounced

Opposition deputies attacked the government’s economic policy yesterday, accusing it of drawing up «bogus budgets» and recklessly providing state guarantees for a series of loans by public utilities, which are increasingly at default. A reply by the Economy and Finance Ministry to an inquiry by conservative opposition MPs Dimitris Sioufas and Prokopis Pavlopoulos revealed that outstanding state-guaranteed loans of public utilities were 8.65 billion euros in 2002, up from 7.1 billion in 1999. Guaranteed forfeitures rose to 426 million euros in 2002 from 391 million in 2001. These statistics show that the government continues to provide guarantees rather indiscriminately to what are now mostly private enterprises. The guarantees and the forfeitures are certain to have an impact on public debt, which the government has been making an effort to reduce. However, greater care has been given to the adoption of accounting tricks than on following the only method sure to reduce the debt – spending cuts. A similar practice of loan guarantees had been followed in the late 1980s, by an earlier version of the socialist government. However, the impact on the debt did not show, for technical reasons, until 1990-91, when New Democracy was in government. Feeling that they will certainly win the next elections, as polls currently show, New Democracy deputies accuse the socialists of trying to pull a similar trick. Meanwhile, officials from Eurostat, the EU’s statistics agency, are still in town, perusing the government’s books for further signs of creative accounting. So far, revisions on public debt imposed by Eurostat have caused the debt level at the end of 2001 to increase from 99 percent of GDP to 105.3 percent. According to unconfirmed reports, Eurostat officials have found another 2.7 million euros in expenses hidden from the state budget. This would cause the current budget surplus to turn into a slight deficit.