25 April, 2006
Greece's government deficit fell sharply to 4.5% of gross domestic product in 2005 from 6.9% in 2004, 5.8% in 2003, and 4.9% in 2002, the European Union's statistics service said on Monday.
At the same time, the Greek deficit was the third highest in the EU25, following Hungary (6.1%) and Portugal (6.0%) but ahead of Italy (4.1%). Another three member states recorded a deficit of more than 3% of GDP, the bloc's target ceiling - the United Kingdom (3.6%), Germany (3.3%) and Malta (3.3%), Eurostat said in a report.
In 2005, the government deficit in the eurozone decreased from 2.8% of GDP in 2004 to 2.4% in 2005; and in the EU25, it fell from 2.6% to 2.3%. In the eurozone the government debt to GDP ratio rose from 69.8% in 2004 to 70.8% in 2005; and in the EU25 from 62.4% to 63.4%.
Greece's public debt in 2005 totaled 107.5% of GDP, the highest in the bloc, followed by Italy (106.4%), Belgium (93.3%), Malta (74.7%), and Cyprus (70.3%).
For Greece, Eurostat said it had to undertake further examination of deficit and debt data. The increase in the country's deficit in 2004 was mainly due to a change in the working balance of the state budget and a downward revision of the surplus for social security funds.
"Despite the recent improvement in the statistical processes and good co-operation between Eurostat and the national statistical authorities of Greece, issues remain related to the Greek government accounts of a structural and systemic nature. Eurostat will undertake a methodological visit in coming weeks in order to clarify the pending issues," the statement noted.
Eurostat was providing government debt and deficit data based on figures reported in the first 2006 notification by EU member states for 2002-2005 in implementation of the excessive deficit procedure, based on the ESA95 system of national accounts.
In 2005, government expenditure in the eurozone was equivalent to 47.5% of GDP, and government revenue to 45.1%. The figures for the EU25 were 47.2% and 44.9% respectively. Between 2004 and 2005 the government expenditure ratio in the eurozone stayed the same whereas the government revenue ratio increased.
Progress welcomed in accuracy of Greek data: A spokeswoman for the EU's executive Commission, Amelia Torres, welcomed major progress that Greece has made in the credibility of fiscal data given to the authorities, and she forecast that outstanding issues would be resolved in the near future.
"There is light at the end of the tunnel," Torres told reporters.
Pending were the financial status of local authorities and social insurance funds, due for discussion in May when Eurostat officials visited Athens, Torres added.
Gov't says EU report confirms deficit drop: Economic data released by Eurostat for the European Union's 25 members confirms that Greece's fiscal deficit posted a major decline to 4.5% of gross domestic product (GDP) in 2005 from 6.9% a year earlier, the finance ministry said on Monday.
"Improvement in the trend of fiscal revitalization is also continuing at a brisk pace this year, as shown by implementation of the budget in the first quarter," the ministry said in a statement.
"Reduction of the deficit to below 3.0% of GDP in 2006 is feasible, without requiring new measures. No revision is needed of the budget's goal, which is consistent with the country's commitment as a member of the eurozone," the statement said.
In addition to deficit reduction, a major improvement had also been seen in the transparency of fiscal finances over the past two years, as mentioned by the EU's executive Commission and group of finance ministers.
Outstanding matters in local government finances and social insurance funds would be resolved with Eurostat, as in the case of other problems inherited from the previous Panhellenic Socialist Movement, which lost national elections in March 2004, the ministry noted.
Source: Athens News Agency