Greece's deficit of 10.5% is bigger than forecast
By Garbriele Steinhauser |
April 27, 2011, Wednesday
|
Print Edition
Print Edition
GREECE'S government deficit was significantly bigger than forecast last year, European Union data showed yesterday, underlining the difficulties the debt-ridden country is having to get its finances under control.
Greece's deficit hit 10.5 percent of economic output in 2010, well above the 9.6 percent the European Commission, the EU's executive, predicted last fall.
The country's debt swelled to 142.8 percent of gross domestic product, according to data released by EU statistics agency Eurostat - the highest in the eurozone and above the 140.2 percent the commission had forecast.
Greece had to be saved from bankruptcy with 110 billion euros (US$160 billion) in rescue loans last May, but continues to struggle to raise revenue as its economy shrinks. Most economists expect the country will eventually have to restructure its debt - either by asking creditors to give it more time to repay or even cutting the total amount owed. However, EU officials have so far ruled out a restructuring.
The Greek finance ministry attributed the larger deficit to a deeper than expected recession, which cut into tax revenues and social security contributions.
"In any case, the Greek government remains committed to achieving its deficit targets under the Economic Adjustment Programme and will take all necessary measures in that direction," the ministry said in a statement.
In its bailout program - which spells out Greece's path to financial health - Athens promised to get its deficit below the 3 percent maximum allowed by EU rules in 2014.
The 17 countries that use the euro had an average deficit of 6 percent last year.
The highest deficit was produced by Ireland - the second country that needed to be bailed out by other EU nations and the International Monetary Fund - at a record 32.4 percent of GDP due to costly bank bailouts, only just above the 32.3 percent forecast.
Portugal, which is now negotiating its own package of rescue loans, had a deficit of 9.1 percent.
Greece's deficit hit 10.5 percent of economic output in 2010, well above the 9.6 percent the European Commission, the EU's executive, predicted last fall.
The country's debt swelled to 142.8 percent of gross domestic product, according to data released by EU statistics agency Eurostat - the highest in the eurozone and above the 140.2 percent the commission had forecast.
Greece had to be saved from bankruptcy with 110 billion euros (US$160 billion) in rescue loans last May, but continues to struggle to raise revenue as its economy shrinks. Most economists expect the country will eventually have to restructure its debt - either by asking creditors to give it more time to repay or even cutting the total amount owed. However, EU officials have so far ruled out a restructuring.
The Greek finance ministry attributed the larger deficit to a deeper than expected recession, which cut into tax revenues and social security contributions.
"In any case, the Greek government remains committed to achieving its deficit targets under the Economic Adjustment Programme and will take all necessary measures in that direction," the ministry said in a statement.
In its bailout program - which spells out Greece's path to financial health - Athens promised to get its deficit below the 3 percent maximum allowed by EU rules in 2014.
The 17 countries that use the euro had an average deficit of 6 percent last year.
The highest deficit was produced by Ireland - the second country that needed to be bailed out by other EU nations and the International Monetary Fund - at a record 32.4 percent of GDP due to costly bank bailouts, only just above the 32.3 percent forecast.
Portugal, which is now negotiating its own package of rescue loans, had a deficit of 9.1 percent.
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