Greek markets slump as report finds budget figures unreliable
THE European Commission said "severe irregularities" in Greece's statistical data leave the accuracy of its budget-deficit figures in doubt.
Greek stocks and bonds tumbled after the report questioned the accuracy of the statistics presented by both the new Athens government and the previous administration, and said political interference with statistics remained an issue.
The government of Prime Minister George Papandreou raised the deficit forecast for last year to more than 12pc of output (GDP) soon after winning elections in October, from a previous forecast of 3.7pc.
"Unless the institutional weaknesses identified in this report are addressed and proper checks and balances introduced, the reliability of Greek deficit and debt data will remain in question," the commission said in the report.
The report marks the EU's latest challenge to Greek statistical data, after revisions in 2004 indicated the country should not have qualified to join the euro. Greece has met the EU's deficit target just once since joining, according to commission figures in November.
"The most recent revisions are an illustration of the lack of quality of the Greek fiscal statistics and of Greek macro-economic statistics in general.
"They show that the progress in the compilation of fiscal statistics in the country, and the intense scrutiny by Eurostat since 2004, have not sufficed to bring the quality of Greek fiscal data to the level reached by other EU member states," the commission said.
The report came as International Monetary Fund officials arrived in Athens to assist in deficit cuts. EU Council President Herman van Rompuy met with Mr Papandreou and said Greece's promise to bring the shortfall within the EU limit of 3pc of output in 2012 "must be met". (Bloomberg)