By Angelika Papamiltiadou

ATHENS (MNI) – Greece’s 2009 public deficit could be revised to 16%
of GDP from 13.6%, the general secretary of the Finance Ministry hinted
Monday.

These are the works of the previous government, which up to last
September said the deficit was 6%,” Dimitris Georgakopoulos told a Greek
radio station. “And the deficit is heading towards 16%.

The official was referring to upward revisions for the deficit and
debt for 2006-2009 expected to be announced by Eurostat on Friday. The
initial revisions given by Eurostat in April were 0.3-0.8% for the
deficit in 2009 and up to 7% for the public debt.

Since then, however, Eurostat officials have been inspecting the
data, which showed that the states obligations towards hospitals,
indebted public utilities and social security funds were much higher
than initially estimated.

In the past few days, Greek media have reported that the 2009 debt
will be revised between 14.5% and 15.5%, citing Finance Ministry
sources, while the debt will be revised by 10%.

Government sources told Market News that the figures have not been
finalized yet, as the process of collecting data will continue up to the
last minute.

Both Eurostat and the Greek government want to close the books on
the past and remove the asterisks that have been accompanying the data
up to now.

But the revisions are expected to affect the 2010 and 2011 targets
and a new package of austerity measures should be announced in November
after the municipal elections.

According to this year’s data through September, revenues and
expenditure results have not reached the targets set in the loan accord
signed by Greece and the EU and the IMF in May.

Finance Minister George Papakonstantinou has indicated that there
will be a new round of spending cuts in the wider public sector, without
touching salaries and pensions. But analysts wonder whether the
shortfalls can be covered without raising taxes.

The government has said it will have the deficit down to 7.8% by
the end of this year. But the revenue shortfall, combined with
Eurostat’s revisions, are expected to change plans.

Both the European Commission and the ECB have repeatedly warned
Greece that the drastic deficit cut achieved so far cannot be sustained
without a comprehensive growth plan to boost competitiveness and enhance
investment opportunities. But the government has yet to announce the
plan.

Moreover, the latest figures indicate that recession is deepening,
unemployment is rising above 14% and liquidity in the market is
extremely limited. Inflation remains above 5.7%, while private
consumption is sluggish. Social partners have warned the government not
to increase the tax burden on households any further.

The next inspection of the Greek economy will take place November
15, during which plans for the 2011 budget will be determined as well as
any additional measures for 2010.

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