Greek deficit to be ‘pardoned’

Date: 02/12/04

By Anna McLauchlin

A line will be drawn under the fiasco of Greece's hidden deficit following an exchange of letters between the European Commission and the Greek government, sources said on Wednesday (1 December).

A Greek official told European Voice that the Greek deputy finance minister met Economic Affairs Commissioner Joaquín Almunia last week to discuss the infringement procedure which was officially announced by the Commission on Wednesday.

“The feeling is that the door will close on this issue after a simple exchange of letters to highlight the problem in the past,” the official said. “The Commission tells us this will be the case and we are happy with that.”

A Council of Ministers official said that finance ministers were to back, at their 7 December meeting, the Commission's infringement procedure against Athens. The official said that the ministers would also use “strength of language” to stress the seriousness of the situation and discourage any further abuse of the system. They will declare that they look forward to the Commission's guidelines on strengthening statistical governance that will be published this month.

Some were quick to criticize the Commission's position. German centre-right deputy Alexander Radwan, who sits on the European Parliament's economic committee, said: “The Commission is not thinking about sanctions and that is the main problem. How can we be sure in the future that the new member states will give the correct data?” Asked what sanctions should be imposed, he said: “It could be financial sanctions in the form of reduced funds or loss of voting rights in the economic committee.”

A Commission spokeswoman said that there was “no intention of imposing political sanctions” against Greece, despite admitting that the country would not have entered the eurozone if the figures had been known.

A Council spokesman also confirmed that there were no indications that national governments were considering further action.

The infringement procedure, which begins with a letter requiring assurance from Athens that all future data will correspond to EU regulations, could end in financial penalties but only if the Commission is not satisfied with Greece's response and refers the matter to the European Court of Justice.

A Commission study into Greece's deficit revisions found most of the relevant players at fault. The majority of the blame lay with the Greek government, the report said, but the EU's statistics office Eurostat should have informed the correct political players of the situation sooner than they did after first discovering discrepancies in Greece's data in 1997.

Article says that after an exchange of letters between the European Commission and the Greek Government there would be no further sanctions relating to Greece's hidden deficit. The European Commission had launched an infringement procedure against Greece after it had emerged that the country had passed on false figures about its public deficit to the European institutions.