Greek 2006-2009 Debt, Deficit to Be Revised, EU Says

The European Union said its estimates for Greece’s budget deficit and government debt will be revised higher for the years 2006-2009.

Greece pledged to reduce its budget shortfall, the second largest in the EU last year, and increase tax revenue in return for emergency loans from the bloc and the International Monetary Fund. The EU statistics office Eurostat, which reviewed Greek government statistics, will publish the revisions by Oct. 22.

“After Eurostat’s latest visit, it was evident that some areas of uncertainty remain,” Amadeu Altafaj, spokesman for EU Economic and Monetary Affairs Commissioner Olli Rehn, told reporters in Brussels today. As a result, Rehn “instructed Eurostat to reinforce its resources on the ground for the urgent task of clarifying the Greek national accounts.”

Greece’s widening deficit and questions about the accuracy of its economic data have undermined the credibility and enforcement of the EU’s budget rules. In January, the European Commission, the 27-nation EU’s executive arm, cited “severe irregularities” in the country’s data.

Eurostat is exercising for the first time its new audit powers, which entered into force on Aug. 19 and were granted after the EU learned Greece had used secret financial transactions to conceal debt.