Tuesday

7th Jul 2020

Greece broke euro rules when it joined euro, says Government

Greece was in breach of the euro rules at the time it joined the single currency, according to new figures produced today by the Greek government.

After recent controversies surrounding the accuracy of its economic reporting, Athens has revised upwards its budget deficit figures - tax receipts minus public spending - from the years 2000 onwards.

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The revised figures show that Greece - which joined the single currency in 2001 - had a budget deficit of 4.1 percent in 2000, revised up from two percent.

Under EU rules, a country attempting to join the euro must have a deficit under three percent before it is permitted to join the currency.

However, Kyriakos Gialoglou, a Greek economist from the CEPS think tank in Brussels, pointed out that the deficits in 1998 and 1999, which were the years assessed when the decision to admit Greece was taken, were not revised by Mr Alogoskoufis today.

"There is no evidence of book-cooking for those years", said Mr Gialoglou.

Enormous problem

Even the normally reserved President of the European Central Bank (ECB), Jean-Claude Trichet, expressed strong concern about the accuracy of Greek figures.

Speaking before MEPs in the Economics and Monetary Affairs Committee today, Mr Trichet said, "as regards Athens and the Greek figures, this is a really enormous problem. We have to be sure that the figures presented are reliable and pertinent".

Ministers are also worried about the Greek situation. At a recent informal meeting of finance ministers in the Hague, the Dutch Presidency expressed disquiet at Athens accounting.

According to Reuters, Greek Finance Minister Giorgios Alogoskoufis, blamed the previous Socialist government - which was in power at the time. "The fiscal derailment is due to actions and omissions by the previous government", the agency quotes Mr Alogoskoufis as saying.

The current administration has projected a deficit of 5.3 percent this year, shattering the ceiling of three percent imposed by the EU's Stability and Growth Pact.

The EU's statistical arm, eurostat, will tomorrow publish revised figures for several countries including Greece.

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