Eurostat probes accounts trickery

The State’s books are under minute examination by a team of experts from Eurostat, the European Union’s statistics agency, which has found that creative accounting has been much more pervasive than previously suspected. Eurostat is urging the government to review the accounting practices which aimed at hiding the true extent of budget deficits and the public debt. Spending items missing from public accounts appear to exceed 30 billion euros. So far, a Eurostat decision obliging Greece, and four other EU members, to include receipts from share-convertible bonds as part of their debt, has increased the country’s total debt at the end of 2001 to 105.3 percent of the gross domestic product (GDP) from 99.2 percent previously. If the reforms are implemented, the much-advertised budget surplus which Greece achieved in 2001, after almost four decades of deficits, will also disappear. The extent of the budget deficit is not yet known. Besides the well-known issues of bonds against future receipts and share-convertible bonds, Eurostat is closely looking at the following items: interest on the above-mentioned bonds; military expenditures; state guarantees on public utilities’ loans; capital transfers; the suddenly discovered «surpluses» in social security funds; the role of the state portfolio management company (DEKA) in lowering the deficit; general government accounts; and receipts from the transition into the euro.