Greece on Monday revised its projected deficit for 2010 to 9.4 percent of GDP, following an upward revision of deficit and state debt figures for 2009 published by Eurostat earlier in the day and the lifting of its reservations on Greek data.
Greece's fiscal deficit for 2009 has been upped to 15.4 percent of GDP and the state debt to 126.8 percent of GDP, in revised figures published by EUROSTAT in Brussels on Monday.
In a release issued Monday, Eurostat also announced that it is "lifting the reservation on Greek data expressed in its News Release of 55/2010 of April 22, 2010", adding that "Eurostat and the Hellenic Statistical Authority (ELSTAT) have addresses all of the issues identified in the last reservation during a series of EDP (Excessive Deficit Procedure) methodological visits".
A Greek finance ministry announcement issued later said that "the cycle of dispute and lack of credibility of the Greek statistical data closes today, and one more step in the direction of restoring the confidence of the citizens, the international partners and markets in the fiscal administration of Greece is completed".
In that context, the ministry reassured the public regarding speculation on new additional measures, noting that "the drastic reduction of the deficit by 2014 will be effected in a balanced and fair way and in accordance with the commitments that the country has assumed".
"It (the deficit reduction) will not be made through further cuts in salaries and pensions, nor with tax increases beyond those we have already committed ourselves to. It will be done mainly through a rationalisation of state expenditures, so that the taxpayers' money will not go to waste".
According to the finance ministry, apart from Eurostat's lifting -- with its publication of the finalised data for the period 2006-2009 -- of all its reservations on Greek fiscal data, equally important is the fact that the biggest deficit reduction ever in Greece -- 6 percentage points of GDP or more than 14 billion euros, much higher than initially planned -- is being achieved in 2010.
The ministry further noted that the government has committed to continuing the fiscal effort in accordance with the 3-year Economic Policy Program ('Memorandum').
According to figures released by the finance ministry, the fiscal deficit for 2009 has been revised upward from 13.6 percent of GDP to o 15.4 percent of GDP, or 66,150 million euros, representing an increase of 1.8 percentage points of GDP.
The upward revision is attributed to the inclusion of public organisations to the General Government (representing a deficit increase of 0.7 percent of GDP), adjustment of the social security funds' and OTA (local government) accounts (representing a deficit increase of 0.9 percent of GDP), and a reduction of the 2009 GDP (corresponding to a 0.2 percent increase in the deficit).
The revision also affects the figures of the state debt, into which the accrued debts of the state enterprises that have been entered into the General Government have been incorporated. The 2009 General Government deficit has been revised to 298,032 million euros or 126.9 percent of GDP from 115.4 percent of GDP, representing an increase of 11.4 percentage points of GDP, the ministry said.
The revision is attributed chiefly to the incorporation of the DEKO (public utilities and organisations) to the General Government figures (representing a debt increase of 7.75 percentage points of GDP, or 18,204 million euros) and adjustment of the off-market swaps (representing a debt increase of 2.3 percentage points of GDP, or 5,530 million euros).
Following the 2009 debt and deficit revision, the deficit for 2010 is now projected at 9.4 percent of GDP, the ministry said, adding, however, that, in relation to 2009, a fiscal adjustment of more than 14 billion euros has been achieved, from over 36 billion euros in 2009 to approximately 22 billion euros in 2010. As for the state debt, it has now been revised to 144 percent of GDP.
The ministry also said that the figures released by Eurostat on Monday are the result of close cooperation and hard and consistent work by Eurostat and the recently-established independent Hellenic Statistical Authority (ELSTAT) and all other agencies involved in the provision of fiscal statistics.
That, it continued "also proves the magnitude of the misorientation of the Greek citizens and the international partners that was attempted with the concealment of the true size of the deficit on October 2, 2009, and the provision of data that estimated the deficit at 6 percent of GDP, in other words nearly 10 percent of GDP or more than 20 billion euros above what it actually was...an effort that struck the biggest blow to Greece's credibility and led to an even greater crisis in confidence faced by the country in its recent history".
The finance ministry acknowledged that the revision of Greece's macroeconomic indicators leads to a more adverse 'starting point' for the Economic Policy Program. However, if the deficit figures had not been revised, Greece would have achieved the targeted 8.1 percent of GDP this year. But even given the current conditions, the deficit reduction achieved is the reply "to those speaking of 'shortfalls', 'failures' and 'minimal reduction of the deficit' with respect to execution of the toughest budget in recent decades," the ministry announcement concluded.