Tuesday

16th Oct 2018

Revised Greek deficit figures cause outrage

Senior EU financial personalities expressed deep concern, bordering on amazement, on Monday night (19 October) over recently revised Greek deficit forecasts.

At a Luxembourg meeting of the euro area's 16 finance ministers, Greek minister George Papaconstantinou from the newly elected Socialist government gave a presentation on his country's shaky situation.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

Forecasts released earlier this year by the former centre-right government predicted a deficit of 3.7 percent of GDP for 2009. But new figures released by the country's central bank now say it is more likely to exceed 10 percent of GDP, and could hit 12 percent.

"I have to say that I am very impressed by the difference between the old and the new figures," said the meeting's chairman, Jean-Claude Juncker, with characteristically dry sense of humour.

"It happens occasionally but if it happens again we risk putting all Eurostat data at risk of credibility," he added more seriously.

Greek deficit forecasts made by Eurostat – the EU's statistic's office – have also been off the mark due to the poor quality of information provided to them by the southeastern European country.

The EU's economy commissioner, Joaquin Almunia, was straight to the point in the news conference after the meeting.

"We want to know what has happened and why it has happened," he said, indicating that the commission, Eurostat and the Greek statistics office would be getting together shortly to discuss the issue.

"Serious discrepancies will require an open and deep investigation," he added.

Large states told to respect budget pact

While one of Europe's big spenders was given a thorough chastising, France and Germany were also told to get their finances in order.

EU economies are bound by the Stability and Growth Pact which limits budget deficits to three percent of GDP. However a 2005 revision of the pact allows government's to exceed this level under exceptional circumstances, an alteration they have taken full advantage of in the current climate.

Twenty of the EU's 27 members have now been the subject of some form of deficit action from the European Commission, meaning a report with a timetable to bring deficits down.

France expects its overall public deficit to reach 8.2 percent of GDP in 2009, rising to 8.5 percent in 2010. Germany - the euro area's biggest economy - expects its deficit to swell from 3.7 percent of GDP this year to 6 percent in 2010.

Mr Juncker said smaller member states would have great difficulty in explaining to their citizens why spending cuts and tax rises were needed to bring deficits down, if their bigger neighbours did not take similar action.

Jean-Claude Trichet, president of the European Central Bank, agreed. "France and Germany have to be treated in the same fashion," he said.

Euro area finance ministers now agree that exit strategies to end the current stimulus measures should commence in 2011, assuming commission figures out next month point to economic recovery in 2010.

The precondition is that any forecast euro area growth is based on normal economic drivers and not the current stimulus spending which is inflating demand.

Once that condition is met, budget consolidation through spending cuts and tax rises will need to exceed the normal 0.5 percent of GDP warned Mr Juncker, while Mr Almunia indicated that for several member states the process will need to start before 2011.

EU warns Italian populists on Greek-type crisis

The EU commission president urged Rome to rethink its budget plans to avoid a Greek-style euro crisis. Meanwhile, Italy's finance minister tried to calm his colleagues in Luxembourg.

Airbnb agrees to clarify pricing for EU

The justice commissioner says the accommodation-rental website will better inform users about prices, and about the legal status of their 'hosts'. Facebook, however, could face sanctions if it doesn't comply with EU rules.

Airbnb agrees to clarify pricing for EU

The justice commissioner says the accommodation-rental website will better inform users about prices, and about the legal status of their 'hosts'. Facebook, however, could face sanctions if it doesn't comply with EU rules.

Stakeholders' Highlights

  1. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  2. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  3. NORDIC COUNCIL OF MINISTERSState of the Nordic Region presented in Brussels
  4. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  5. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  6. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  7. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  8. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  9. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  10. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  11. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  12. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All

Latest News

  1. EU ministers struggle to deal with Poland and Hungary
  2. Commission tried to hide details of 'WiFi4EU' glitch
  3. Brexit standoff continues before EU summit
  4. ASEM: Global Partners for Global Challenges
  5. How Juncker's 'do less' group concluded EU should not do less
  6. Cyprus and Russia: Association of Cyprus Banks responds
  7. Orthodox church split just tip of Putin's crumbling 'soft power' in Ukraine
  8. Daily reality in Western Sahara - and how EU can protect it

Join EUobserver

Support quality EU news

Join us