Greece to receive warning letter over incorrect deficit figures
29.11.2004 - 17:43 CETEUOBSERVER / BRUSSELS - The European Commission will on Wednesday (1 December) begin infringement proceedings against Greece for incorrectly presenting statistics relating to its budget.
Athens admitted earlier this month that its deficit figures had broken the EU's three percent limit every year from 1999 onwards.
The issue will be discussed in the European Commission meeting on Wednesday and sources close to the Greek government and the Commission have confirmed that they believe a letter will be sent to the Greek authorities, formally beginning infringement proceedings against them.
Athens will then have two months to reply.
Commission sources say that, although the Greek government has gone to great lengths to correct the situation, they have not fully reassured the Commission that sufficient safeguards have been put in place to ensure that the incorrect reporting of data does not happen again.
Brussels will therefore be opening the procedures, which could end up in court if Athens does not respond sufficiently to the Commission's concerns - although Greek officials believe this is unlikely.
Military spending
Countries are not permitted to run a budget deficit above three percent of GDP before joining the euro or during their membership of the euro zone.And the data submitted to the Commission were some way below the correct level, forcing Brussels to send a Eurostat team to investigate.
The Athens authorities incorrectly calculated income from social security, and military spending was not accounted for appropriately.
The Greek Finance Ministry projects that it will reduce its deficit figure from an estimated 5.3 percent in 2004 to 2.8 percent next year, scraping back below the maximum permitted amount.