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GreekReporter.comGreece2009 Deficit Could Surpass 14% of GDP

2009 Deficit Could Surpass 14% of GDP

The agency Eurostat could raise its figures on Greek deficit for 2009, which could be above 14% of GDP, according to sources at the Ministry of Finance. Sources say that a possible reduction of deficit, which for 2009 had until now been fixed at 13.6%, would not have a significant impact on the aims of reducing deficit for 2010.
In fact, it has been suspected for some time that the deficit for 2009, that the government of Costas Karamanlis had put at 6% and later 8%, and which eventually exploded at the advent of the socialist government last October, was higher than the 13.6% that appeared in official provisional figures. The Finance Minister, Giorgios Papaconstantinou, had suggested on more than one occasion in the last few months that the deficit could hit 14% of GDP. It may now even reach 14.5%, but the predictability of the revaluation renders insignificant the impact on the now improved targets of deficit reduction for 2010, (7.8% down from 8.1%) and for 2011 (7% instead of 7.6%).
The news released today also coincides with the desire expressed by the government of Giorgios Papandreou to set up a commission of parliamentary inquiry into the economic responsibility for the crisis, a year after it came to power. The year-long period has been marked by silence from Karamanlis over the accusations levelled at him by the government and a large part of the press that he pushed Greece to the brink of bankruptcy by falsifying budget figures, leading to financial difficulties. Karamanlis’ party, New Democracy, reacted to the accusations by criticising Papandreou of aggravating the crisis to political ends, bringing about the conditions for financial difficulties. The debate is becoming ever more heated ahead of November’s local elections, that everyone considers a referendum on the government’s austerity plan.

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