Loans and Finance

Loans and Finance


News and information about loans, money, debt, finance and business issues.
Powered by

Wednesday, February 03, 2010

Dodgy Stats

The European Commission (EC), despite supporting Greece's plan to reduce its budget deficit, is none too happy with Greece's less than "reliable" statistics.

In fact, it is starting legal proceedings against Greece for allegedly reporting faulty statistics. This move is based largely on Greece's drastic revision of its figures last October.

The Greek Government has until May 15 to adopt legislation that forces it to produce monthly updated public budget reports. If it does not, the EC may take the government to court.

The EC also told Greece to set aside a 10% (of current expenditure) contingency fund to cover future budgetary pressures.

Greece's 2009 deficit was 12.7% of GDP, three times initial estimates and more than four times the 3% limit set by the EU.

Greece is attempting to resist pressure from the EU to reorganise its finances. This resistance may be understandable from a domestic point of view. However, given that they knew what they were signing up to when they joined the EU, what did they expect?

Greece is learning the hard lesson, that the EU's "one size fits all" approach to monetary and fiscal policy simply does not work at a local level.

In the event Greece collapses financially; Portugal, Spain and Ireland will be next.

No comments:

Post a Comment