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8th Aug 2022

Greek debt targets missed, says independent report

  • The Greek economy is performing worse than expected (Photo: EUobserver)

Greek finance minister Evangelos Venizelos on Thursday attacked a report warning that government debt continues to increase and has already missed 2011’s budget target even though there are still four months left in the year.

“All responsible international organisations know in which way macroeconomic and fiscal reports are compiled, checked and published,” Venizelos said responding to the release of an internal report from the State Budget Office, a recently established oversight body independent of the government.

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“It is still clear that the budget office still lacks this knowledge, experience and responsibility,” he said.

The Budget Office report had warned that Athens is not moving quickly enough to implement the far-reaching restructuring and cuts to spending promised to international lenders.

“It is clear that the country's problem is not just the size of the public debt but the inability to consolidate the current fiscal management. Despite gigantic effort for fiscal adjustment, no primary surplus has been achieved. On the contrary, the primary deficit is widening,' the report said.

“The widening of the deficit is associated with worrying fiscal developments, particularly delays in implementing the adjustment programme, and the limited efficiency of revenue collection mechanisms.”

The Budget Office stated that the primary deficit for the first seven months of 2011 is “significantly higher” than the target for the whole of the year - 1.7 percent of GDP.

It added that even if the government manages to successfully implement all austerity measures, this year, it would still not meet its targets.

The release of the document, first published in Greece’s Kathimerini daily, could not come at a worse time.

This week, inspectors from the EU-ECB-IMF troika arrived in the Greek capital to assess whether the country was sufficiently on track in its austerity measures to receive the latest tranche of bail-out cash, some €8 billion.

An unnamed troika source put the government deficit at one percentage point higher than the target, according to a Reuters report.

The inspectors blame an unexpectedly worsening economy, lower tax revenues and a lag in the implementation of austerity measures.

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