Tuesday

1st Dec 2020

EU report slams Greece over false statistics

A report published by the European Commission on Tuesday (12 January) has condemned Greece for falsifying its data on public finances.

Written up at the behest of EU finance ministers, the document talks of "deliberate misreporting of figures by the Greek authorities in 2009."

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The country's newly elected Socialist government upwardly revised its 2009 deficit forecast last October from 3.7 to 12.5 percent, a considerable change that prompted credit rating downgrades and outrage in other EU member states.

"Revisions of this magnitude in the estimated past government deficit ratios have been extremely rare in other EU member states, but have taken place for Greece on several occasions," said the report.

The document continues that the Greek data is so unreliable that actual debt and deficit figures could be even higher than the revised forecast.

In a damning paragraph, the commission says: "poor co-operation and lack of clear responsibilities between several Greek institutions and services  ...ambiguous empowerment of officials, absence of written instruction and documentation, which leave the quality of fiscal statistics subject to political pressures and electoral cycles".

Questioned whether other EU governments could also be fiddling their public finance figures, the EU's economic commissioner-designate, Olli Rehn, told MEPs this week during a parliamentary hearing that he thought Greece was an isolated case.

Some analysts say the country's debt level, currently at 113 percent of gross domestic product and set to rise further, poses a major problem for Athens and could threaten the stability of the euro due to spillover effects into other member countries and market jitters.

EU governments have asked the commission to put forward a list of measures to help the embattled administration tackle the issue, with the handover likely to happen in the coming days. Greece is then expected to report back to the commission by the end of the month with a list of actions it plans to take.

Van Rompuy support

In a badly needed show of support, the EU's new permanent president, Herman Van Rompuy, said Greece is now taking steps to meet the "substantial" challenge posed by its debt and deficit levels.

After a meeting with Greek Prime Minister George Papandreou on Tuesday, Mr Van Rompuy said he was "confident that the Greek government is already taking the necessary further steps to address the situation."

"Resolute fiscal consolidation should start without delay in 2010 and the deficit should be brought below three percent by the end of 2012," he added.

Greek experience to spur EU request for audit powers

Frustrated by the ongoing saga over Greece's public finances, the European Commission has indicated it will seek audit powers for the EU's statistics office - Eurostat - in order to verify elements of national government accounts.

Germany asks capitals to give a little in EU budget impasse

European Parliament negotiators are demanding €39bn in new funding for EU programmes such as Horizon research and Erasmus, in talks with the German EU presidency on the budget. Meanwhile, rule-of-law enforcement negotiations have only just begun.

EU budget talks suspended in fight for new funds

MEPs are requesting additional, new funding of €39bn for 15 EU programs. The German presidency argues that budget ceilings, agreed by EU leaders at a marathon summit in July, will be impossible to change without a new leaders' meeting.

EU countries stuck on rule of law-budget link

Divisions among EU governments remain between those who want to suspend EU funds if rule of law is not respected, and those who want to narrow down conditionality.

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