Wednesday

21st Feb 2024

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

Get the EU news that really matters

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.

France's Le Maire 'goes German' with austerity budget

The French government announced €10bn in further spending cuts. However, defence spending is set to increase significantly, up to €413bn from €295bn, while €400m was cut from a fund meant for renovating schools, carpooling infrastructure, and other environmental projects.

Online platforms must be liable for payment scams, say MEPs

MEPs have agreed on new rules to level the playing field between banks and non-banks, and to make payments more user-friendly, cheaper and safer — including measures to make online platforms liable for payment fraud that occurs through their services.

France's Le Maire 'goes German' with austerity budget

The French government announced €10bn in further spending cuts. However, defence spending is set to increase significantly, up to €413bn from €295bn, while €400m was cut from a fund meant for renovating schools, carpooling infrastructure, and other environmental projects.

Opinion

The elephant in the room at this weekend's African Union summit

Italy's offer to mobilise €5.5bn over the next years, overwhelmingly in already-allocated loans and guarantees, pales in comparison to the financing challenges faced by Africa. Only an EU-wide coordinated financial offer can credibly respond to African needs.

Latest News

  1. African leaders unveil continent-wide plan to buy medicines
  2. EU urban-rural divide not bridged by cohesion policy, report finds
  3. Impending Rafah disaster shows up politics of humanitarian aid
  4. Sweden heading into Nato, after Orbán-Kristersson deal
  5. EU-Israel trade agreement must be on table to stop Rafah attack
  6. 'Nightmare' 2024 sees Orbán struggle ahead of EU elections
  7. 'Crying wolf' win for chemicals lobby at Antwerp EU meeting
  8. Hungary blocks EU appeal for Israel not to strike Rafah

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Join EUobserver

EU news that matters

Join us