2nd Jun 2020

EU staff to head to Greece amid deficit reports

EU officials are preparing to make their way to Greece this week amid reports that the country's 2009 budget deficit may have topped already dire earlier forecasts.

With an expected touchdown in Athens this Wednesday (6 January), staff from the European Commission and the European Central Bank will be keen to hear how the eurozone country with the largest deficit plans to rectify the problem.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • Greece's debt level is expected to exceed 125 percent of its GDP this year (Photo: Flickr)

The probing visit comes amid reports that the southeastern EU country has exceeded an already gloomy budget forecast for 2009.

According to Greek financial website Ta Nea, the country's deficit last year may have reached 14.5 percent of GDP, largely due to falling tax revenues. The deficit figure is even higher than the 12.7 percent revealed by the Greek Socialist government in November.

Athens is due to submit a budget report - known as a stability report - to the European Commission before the end of this month, as eurozone finance ministers prepare to discuss the issue at their regular monthly meeting on 15-16 February.

Under EU rules, member state deficits are not permitted to exceed three percent of GDP, although the vast majority are currently in breach of this threshold due to the financial crisis.

"There is close cooperation with the European Commission to avoid any danger of rejecting our stability programme, something which would be catastrophic," said Greek government spokesman George Petalotis.

The finance ministers' meeting comes just days after a planned informal reunion of EU heads of state, which the new permanent president of the European Council, Herman Van Rompuy, has announced will take place on 11 February.

Economic issues are set to dominate the meeting, with the subject of deficits likely to be aired.

The government of Prime Minister George Papandreou, elected in October following promises of higher spending and wages, is trying to persuade investors it can cut its deficit over the coming year.

An upward revision of the country's expected 2009 deficit by the new government shortly after the elections sent investors into a panic, prompting credit rating agencies to cut the Greece's debt rating.

Athens has promised to cut its deficit by four percent this year, hinting recently it may make further cuts of one billion euros.

However analysts point to the 'one-off' nature of the government's initiatives, including asset sales, sin taxes, a 90 percent levy on bank bonuses, and a clamp-down on tax-evasion – rather than measures to tackle the country's bloated structure of state spending.

Vestager hits back at Lufthansa bailout criticism

Commission vice-president in charge of competition Margarethe Vestager argued that companies getting large capital injections from the state during the corona crisis still have to offset their competitive advantage.

German court questions bond-buying and EU legal regime

The German Constitutional court ordered the European Central Bank to explain its 2015 bond-buying scheme that helped eurozone stay afloat - otherwise the German Bundesbank will not be allowed to take part.

No breakthrough at EU budget summit

EU leaders failed to reach agreement on the EU's long-term budget, as richer states and poorer 'cohesion countries' locked horns. The impasse continues over how to fund the Brexit gap.

News in Brief

  1. Trump threatens to use army to crush unrest in US
  2. Trump wants Russia back in G7-type group
  3. Iran: Fears of second wave as corona numbers rise again
  4. WHO: Overuse of antibiotics to strengthen bacterial resistance
  5. Orban calls EU Commission recovery plan 'absurd'
  6. ABBA's Björn new president of authors' rights federation
  7. Malta and Libya to create anti-migrant 'units'
  8. France reopening bars and parks next week

Stakeholders' Highlights

  1. UNESDAHow reducing sugar and calories in soft drinks makes the healthier choice the easy choice
  2. Nordic Council of MinistersGreen energy to power Nordic start after Covid-19
  3. European Sustainable Energy WeekThis year’s EU Sustainable Energy Week (EUSEW) will be held digitally!
  4. Nordic Council of MinistersNordic states are fighting to protect gender equality during corona crisis
  5. UNESDACircularity works, let’s all give it a chance
  6. Nordic Council of MinistersNordic ministers call for post-corona synergies between economic recovery and green transition

Latest News

  1. Malta fiddles on migrants, as Libya burns
  2. Borrell: EU doesn't need to choose between US and China
  3. Post-Brexit and summer travel talks This WEEK
  4. State-level espionage on EU tagged as 'Very High Threat'
  5. Beethoven vs Virus: How his birthplace Bonn is coping
  6. EU's new migration pact must protect people on the move
  7. Spain takes 'giant step' on guaranteed minimum income
  8. Vestager hits back at Lufthansa bailout criticism

Join EUobserver

Support quality EU news

Join us