Griekenland krijgt extra jaar om begrotingsproblemen op te lossen (en)

EUOBSERVER / BRUSSELS - Greece has until the end of next year to whip its economy into shape or potentially receive multi-million euro fines from the European Commission, it was announced on Wednesday (9 February).

Brussels is taking Athens to task for its budget deficit - tax receipts minus public spending - which is almost double the maximum permitted amount of three percent of gross domestic product (GDP).

The Commission told Greece to produce measures to bring the deficit below the three percent ceiling by the end of 2006 or face fines of up to 0.5 percent of GDP.

The deadline was extended by a year "given the sizeable adjustment to be carried out", the Commission said. One official said, "they simply cannot do it in one year".

The deficit was as high as 5.5 percent this year and is projected to decline to 3.6 percent next year.

And the credibility of public finances in Greece received a further blow last year when it emerged that the previous government had underestimated the extent of the problem.

Beware of Greeks bearing deficits

The Greek authorities now have until 21 March to come up with ways to reduce the deficit, either by raising taxes or cutting public spending.

They will then submit further reports in October 2005 then subsequent assessments of their economy in April 2006 and October 2006.

If the Commission decides that the measures are not sufficient, they could impose fines of up to 0.5 percent of GDP on Athens. This would mean a fine of 500 million euro for Greece.

Finance ministers will discuss the matter at their meeting next week.