The Greek government acknowledged today that the country's annual public deficit estimates from 2000 to 2002 had been sharply underestimated, a revelation described by the European Central Bank head as 'an enormous problem'.
Economy Minister George Alogoskufis told the Greek parliament that the shortfall came to 4.1% of output in 2000 rather than the 2% announced at the time. While the deficits in 2001 and 2002 were put at 1.4% in the two years, they in fact had come to 3.7%, he added.
The revised figures are well in excess of the 3% public deficit ceiling imposed on eurozone members.
The figures were revised upwards following an audit of public finances ordered by the conservative government after it replaced a Socialist administration last March, the minister told parliament.
But a government spokesman stressed that the change would not call into question Greece's adhesion to the euro zone in 2001. Euro zone candidates are obliged to show that they have reined in public spending before they can qualify for membership.
Earlier, European Central Bank president Jean-Claude Trichet described the revision to the Greek deficit as 'an enormous problem.
He told the monetary and economic affairs committee of the European Parliament: 'It's a real problem, an enormous problem. We must be assured that the statistics furnished are exact and pertinent'.
The economy minister said the revisions reflected a lower estimate of income from social insurance administrations and a 'precise' ananlysis of defence spending, some of which did not figure in previous budgets.
