Greek 2009 deficit surges to 13.6 per cent of GDP
'Ireland worst offender'
Greece's public deficit for 2009 has shot up to 13.6 per cent of gross domestic product, with yet another half percentage point rise likely, the European Union data agency said yesterday.
However, the Greek government said yesterday that the worse data did not change its target for cutting the deficit to less than four per cent of output this year.
The latest figures from Eurostat showed a sharp increase from the most recent upwards revision to 12.9 per cent of output, but the agency said investigation of data provided by Athens could lead to a further increase.
The figures mean that the baseline for calculations of massive budget cutbacks and reforms imposed by the EU on Greece is far higher than had been estimated.
That in turn is likely to increase pressure on the government in Athens which is discussing details of a possible debt rescue with the EU and IMF.
"Eurostat is expressing a reservation on the quality of the data reported by Greece, due to uncertainties on the surplus of social security funds for 2009, on the classification of some public entities and on the recording of off-market swaps," the EU said.
The last reference concerned to complex fundraising activities undertaken by the controversial US bank Goldman Sachs.
"Following completion of the investigations that Eurostat is undertaking on these issues in cooperation with the Greek statistical authorities, this could lead to a revision for the year 2009 of the order of 0.3 to 0.5 percentage points of GDP for the deficit and five to seven percentage points of GDP for the debt." Greek debt was pegged at 115.1 per cent of output, at €273.4 billion, an improvement on the most recent estimate.
The combined deficit for the 16 euro countries more than trebled in 2009 to 6.3 per cent of output, more than twice the level permitted under the bloc's budgetary rules.
The increase in the deficit from two per cent in 2008 reflected the deepest recession since World War II.
Ireland was the worst offender, at 14.1 per cent, followed by Greece, Spain on 11.1 per cent and Portugal with 9.4 per cent. Portugal and Spain have also come under pressure as speculators push up bond yields, or the interest governments must pay to borrow on commercial money markets.
None of the 27 European Union member states recorded a government surplus in 2009.