Papaconstantinou defends 2009 deficit figure, accuses ND of hiding real data

Former Finance Minister Giorgos Papaconstantinou on Tuesday accused the New Democracy government that was in power between 2004 and 2009 of “systematically” hiding Greece’s economic statistics from European officials and vehemently denied that he inflated the public deficit figure on purpose when PASOK came to power in October 2009.

“I did nothing but present the actual figures,” Papaconstantinou, now environment minister, told a parliamentary committee investigating whether the 2009 public deficit, which eventually reached 15.4 percent of gross domestic product, was misrepresented in order to justify a bailout and tough austerity measures.

“The 2009 deficit is the figure you are aware of and cannot be questioned,” the minister told the panel of MPs.

Papaconstantinou said that the European Commission’s statistics service, Eurostat, had expressed concern about the accuracy of Greece’s figures before PASOK came to power. He said two days before the election in October 2009, the New Democracy government sent Eurostat a deficit forecast of 6 percent of GDP. “This was the final criminal act against the country’s interests,” he said.

Papaconstantinou said that at that point it was already clear that the deficit would be in the double digits. The minister said that the conservative government hid the third-quarter budget figures that would have confirmed the deficit was out of control. He added that the European Commission warned Athens in June 2009 that it was on course for a deficit of 10 percent of GDP but the ND administration failed to make this information public. Papaconstantinou accused the center-right party of “intentionally and systematically” hiding actual economic data from Eurostat.

The minister was highly critical of Manolis Kontopyrakis, the head of Greece’s statistics service at the time. Kontopyrakis had accused Papaconstantinou of interfering in the deficit as soon as he took up his post as finance minister. “Mr Kontopyrakis should learn how to calculate GDP, the deficit and the hours in a day,” said Papaconstantinou.

“There is not a trace of evidence from any witness that the government did anything other than faithfully present the fiscal situation,” he added.

Responding to claims that the PASOK government did not take timely measures to reduce the deficit when it came to power, Papaconstantinou said that he would have had to raise at least 7 billion euros in the last three months of 2009 to avoid a double-digit figure. He said this would have been the equivalent of slashing three months’ worth of pensions and public sector salaries.

New Democracy is boycotting the inquiry, so minister who served in the 2004-09 government will not take part in the investigation.  

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