Europese Commissie gaat door met procedure tegen Griekenland vanwege buitensporig tekort op betalingsbalans (en)

The European Commission today found that Greece's budgetary situation has deteriorated further in 2004 despite having the highest economic growth in the euro area and in contradiction with the recommendations of the Council addressed last July. Greece expects the deficit to reach 5.3% of GDP in 2004 instead of the 3.0% foreseen in its March notification. The draft budget for 2005 sets a target for the general government deficit of 2.8% but the measures presented appear insufficient to bring the nominal deficit below the 3% threshold by 2005 as recommended by the Council. Based on this assessment, the Commission recommends to the Council to decide that Greece has taken no effective action to correct its excessive deficit.

"Greece has failed to comply in 2004 with the Council recommendations. It ought to make greater efforts to correct its excessive deficit position especially as it has the highest economic growth in the euro area" said Joaquin Almunia, European Commissioner for economic and monetary affairs.

On 5 July the finance ministers Council issued a recommendation to Greece according to Article 104(7) of the Treaty with a view to bringing the country's excessive deficit to an end by 2005 at the latest by implementing consolidating measures already in 2004. The Greek authorities were also recommended to pay particular attention to factors that contribute to the change in debt levels. Finally, the Greek authorities were also asked to make further efforts with a view to correct the deficiencies revealed in the field of budgetary statistics.

The July Council recommendation gave Greece^[1] until November 5 for taking effective action. According to the Commission's assessment, the measures implemented by Greece have not been effective in reducing the deficit in 2004. Over and above statistical revisions, the fiscal policy stance further worsened in a situation of buoyant economic activity and a large, positive output gap. This however, was partly due to expenditure overruns associated to the organisation of the Olympic Games. The assessment also shows that although the measures in the 2005 budget more than offset the slippage in 2004, they appear insufficient to bring the deficit below 3%.

On the debt front, Greece expects the debt-to-GDP-ratio to be at 112.1% in 2004, which is significantly higher than in 2003 (109.9%), and projects only a marginally decrease to 111.9% in 2005. Large stock-flows adjustments indicate that more attention needs to be paid to factors, other than net borrowing, which contribute to increase debt levels.

Finally, on government data, as explained by the Commission in the letter giving formal notice of the infringement procedure open to Greece on 1 December, there are a number of elements which prove that better mechanisms to ensure the prompt and correct supply of the information are still necessary.

The Commission has, therefore, concluded that Greece is not in compliance with the July Council recommendation under Article 104(7). Under Article 104(8) of the Treaty, as clarified in the Stability and Growth Pact, the Commission has an obligation to recommend to the Council to establish formally that Greece has taken no effective action in response to its 104(7) recommendation.

The text of the Commission's assessment can be found at:

http://europa.eu.int/comm/economy_finance/about/activities/sgp/procedures_en.htm

^[1] In total, seven countries received Council recommendations at that date. Concerning the assessment of compliance with the Council recommendations, see separate press releases IP/04/1528 for Hungary and IP/04/1529 for the five other countries.