Galery

1

The mission of the European statistical office Eurostat is on its next visit to Athens. It started in the beginning of this week and it seems that the outcome could turn into an episode of the “Tales of the unexpected” series. The latest analyses of the data on the development and status of the Greek economy appears inevitable. This became clear after the head of Eurostat Walter Radermacher said that an unknown number of swap-transactions have been completed in previous years but the European statistical office was not informed about them.

One of the most widely discussed transactions of this type is the one with the investment conglomerate Goldman Sachs in 2001. Then the company bought part of the debt in the amount of approximately € 2.4 billion. As a result, the deficit of the country for the relevant period dropped by 1.6 percent of GDP and the external debt decreased from 105.3 percent of GDP to 103.7 percent of GDP. The day to pay the bill, however, came in 2009 when the result (as shown) was not properly reflected in the expenditure statement. So, when Greek and international experts have started to disentangle the state of the Greek economy a year later, old and new debts were reveled.

Another pending budget issue are the costs of social security funds, which known as "black holes" until recently were defined as “white” by the PASOK government. Whatever the colour, however, the deficit issues of social security funds, hospitals and local authorities remain unresolved and the European statisticians expect to find new data on costs swept under the carpet.

According to initial assessment of the Greek economic analysts, the review of the status of the Greek economy will add at least 1% to the budget deficit. The changes will inevitably knock out the 2011 budget that was presented the last week and will enforce new additional spending cuts and extra taxes totaling € 2.35 billion. However, the Minister of Finance George Papaconstantinou said at a press conference during the annual session of the World Bank and the International Monetary Fund that the Eurostat revision of the deficit will not affect the implementation of the economic program of the government and will not impose additional measures during the next year.

The inspection results of the European statistical office are expected on October 22 when it will also announce how the 27 Member States of the European Union settled 2009. The next report on the state of the Greek economy and the degree of implementation of the objectives set out in the Memorandum of financial support by the IMF and the Eurozone will come out at the end of the month. This report is expected to officially state whether the European Commission will require additional measures in 2011 for ensuring the economic stability.