Mede door fraude met begrotingsstatistieken riskeert Griekenland grote boete (en)

EUOBSERVER / BRUSSELS - Greece is one step away from being the first member state to face huge fines for breaking the EU's Stability and Growth Pact - the rules underpinning the euro.

Finance ministers meeting on Thursday (17 February) in Brussels decided to give Greece until the end of next year to reduce its budget deficit below the threshold of three percent of gross domestic product (GDP).

If Athens fails to achieve this, it could be fined up to 0.5 percent of its GDP - roughly 500 million euro.

And the Greek government must produce a report in March on how it intends to reduce its deficit.

Greek Finance Minister Giorgios Alogoskoufis told reporters that Greece would "fulfil its obligations" and was grateful for the extra year to do so.

Finance ministers judged that to force Greece to slash its deficit by the end of this year "may prove economically costly".

Nevertheless, Athens will have to make a huge effort, as its budget deficit hovered around 5.5 percent of GDP last year, with some putting it as high as six percent.

Special case

Austrian finance minister Karl-Heinz Grasser said that, due to its high budget deficit levels and high levels of debt, Greece was a "special case". "This is why we have to be strict", he added.

German finance minister Hans Eichel also spoke out in favour of the tough measures against Greece, saying that Athens had not done enough to comply with the rules and had been given an extra year.

In a statement, ministers also criticised Athens' statistical reporting, calling on the government to "further pursue efforts to improve the collection and processing of general government data".

The problems with Greece's deficit came to light after it was revealed that Greece had been misrepresenting its statistics.

After recalculation, it was discovered that Athens had been over the limit since 1997 - even before it had joined the euro.

Greece's deficit was also swelled by the hosting of the Olympic Games last year.