8-billion-euro additional measures of the hidden deficit

The additional measures bill will rise to 8 bil euros if there is confirmation on the reports that the 2010 budget deficit jumped to 10,6% of the GDP.

As PROTO THEMA has revealed already since January, the actual 2010 deficit stands at double digits (over 10%) instead of 9,4% as estimated so far by the economy team.

The data which confounds government expectations comes from the underestimation of expenses in arrears, in conjunction with the GDP decline due to higher levels of recession as indicated by the latest 2010 data.

So far, the Finance ministry has avoided confirming or denying any of this. But as everything points out, the budget deficit in 2010 was higher than estimated by 2,5 billion. The amount of the total deficit of the previous year exceeds 24 billion and its final size will be mentioned in the Eurostat report, which will be released on April 26 according to information sent by the Greek Statistical Authority.

This causes a new "headache" to the government, since it affects the deficit target of 2011 and requires a new package of measures. The government and the Troika have agreed that uncertainties about the effectiveness of the measures in this year’s budget suggest that the deficit in 2011 will be higher than estimated by 1,74 bil euros, unless additional measures of profitability are taken immediately.

The deficit revision comes at a time when the economic team is negotiating the privatization list for the 50 billion and the austerity measures for 2011-2014 with the Troika.

Moreover, a new Troika team will arrive on Monday to continue the inspection of the data on deficit expenditures, and prepare the arrival of the auditors of our debtors in Athens.

On April 15, the ministry will announce its privatization program for 2012-2015 (22 bil euros) and many of the corrective measures of 2011.

Meanwhile, and earlier than it had initially planned, the government is considering cutting welfare benefits in an attempt to find a solution to cover the gap in the budget.

The Troika is calling for a more specific list of privatizations for the 50 billion, threatening to put "asterisks" in Greece’s financing program.