Europese Commissie doet Griekenland extra aanbevelingen inzake terugdringing begrotingstekort (en)

The European Commission today concluded that Greece is taking effective action to reduce its deficit below 3% in 2006 consistent with the Council decision of last February. The Greek stability programme for 2004-2007 shows the Greek deficit falling to 3.7% of GDP in 2005 and to 2.9% in 2006, after having peaked at 6.1% last year. The budgetary strategy is based on a mix of revenue-enhancing measures and expenditure retrenchment, allowing for a primary surplus of 0.7% of GDP in 2005. But the Commission sees risks for 2005 and beyond, and calls on Greece to implement the necessary permanent measures to ensure the correction of the excessive deficit by 2006.

"The Greek government must be praised not only for implementing the 2005 budget with rigour but also for announcing additional measures for this year. Taking into account the existing risks, I welcome its commitment to present a budget for 2006 in which the deficit would be brought below 3% of GDP" said Joaquín Almunia, European Commissioner for Economic and Monetary Affairs.

Stability programme

The revised update of the stability programme targets a deficit of 2.9% of GDP in 2006 and an overall reduction of 3.7 percentage points of GDP between 2004-2007. The stock of debt is expected to fall below 105% in 2007. Against a slowing yet still strong rate of projected economic growth, the budget deficit net of cyclical factors is however set to stay above the 3% of GDP reference value over the programme period.

In the Commission's view a part of the official revenue and expenditure projections would appear to be on the optimistic side, entailing the risk that deficits may turn out higher than planned. Moreover, on 18 March Eurostat expressed reservations about the 2004 deficit figures, underlining the possibility of upward revisions.

Therefore, Greece is encouraged to implement the necessary measures to ensure the correction of the excessive deficit by 2006 at the latest, as recommended by the Council last February. The Commission also sees appropriate to enhance the efforts aiming at identifying and controlling below-the-line operations, and to improve the collection and processing of general government data in collaboration with Eurostat. The Commission also calls on Greece to take steps to ensure the sustainability of public finances.

Compliance with Council recommendations

The assessment of compliance with the February Council recommendations under Article 104(9) is positive. Available information suggests that the 2005 budget is being implemented rigorously. However, to bring the deficit below 3% of GDP in 2006 additional measures may be needed within the 2006 budget. The Greek government committed to take such measures if necessary. Significant steps have also been taken to identify the different sources of the stock-flow adjustments, which are a main cause of the increase in public debt. Efforts are also being made to improve the collection and processing of government statistics, although more remains to be done, as indicated by the non-validation of the 2004 fiscal data by Eurostat.

Based on this assessment, no further steps are needed at present. A new assessment will be made before the end of the year.

The Council is expected to examine the Commission communication and adopt an opinion on the stability programme on 12 April.

The communication and recommendation to the Council can be found at:

http://europa.eu.int/comm/economy_finance/about/activities/sgp/year/year20042005_en.htm
Comparison of key macroeconomic and budgetary projections