EU starts action against Greece over incorrect data

The European Commission yesterday started legal proceedings against Greece for submitting incorrect economic data - statistics that would otherwise have blocked Greek membership of the euro.

A spokesman for the Commission told The Times that the Commission was very disappointed with Greece over the massive underreporting of public spending debt, with the level of such debt being a key consideration for joining the European single currency.

Speaking at a press conference following the weekly Commission meeting, the spokesman said the Commission had launched an infringement procedure to prevent incorrect or incomplete data transmission in the future. He said the purpose was to ensure that Greece puts its statistical house in order.

The warning comes following an investigation by the EU's statistical arm, Eurostat, which found that Greece's deficit in 1997 was actually 6.6 per cent of GDP and not four per cent as reported by the government. Greece's deficit figures for 1998 and 1999 were also underreported to below three per cent - the threshold criteria of the EU's Stability and Growth Pact, the fiscal rules which underpin the euro.

The commission spokesman admitted that Greece would not have qualified to join the euro in 2001 if the real budget deficit figures had been known at the time.

The Greek incident will have implications for all member states, including Malta, as the EU is adamant that the matter should not be repeated. New proposals are set to be introduced in the new year "to ensure the credibility of the entire statistical system, namely through the adoption of the highest standards as regards the independence, integrity and accountability of the national statistics offices and the reinforcement of the control and inspection capacities of Eurostat".