New 2.2 billion "black hole"

The current deficit for 2010 stands at10.5% instead of the 9.4% of initial estimates, as announced today by the European Statistical Office. This discrepancy arises from the need to cover a “hole” of an extra 2.2 billion. In the government, however, it is believed that the additional 3-billion package plan will be able to cover the needs that originate from last year, as well as the new 2011 deviations and misfires (mainly in terms of revenue) which have reached 2 billion within the first four months of the year.

In a statement issued by the Finance Ministry, it is pointed out that Eurostat does not dispute most of the Greek statistics on the size of the deficit and that despite the deterioration of data, a reduction of the deficit by 5 points (instead of 6, from 15.6% of the GDP in 2009 to 10.5% in 2010), is the largest ever made in Greece or any country of the Eurozone within a year.

As far as the debt is concerned, according to Eurostat data for 2010, Greece has the highest debt in the EU (142.8% of the GDP), with Italy in second ace at 119% of the GDP, followed by Belgium (96.8% of the GDP) and Ireland at 96.2%.

According to the government, the observed deviation from the Introductory Budget provisions of 2011, on the general government deficit for 2010 is due to the following reasons:
a)    The expected impact of the recession on the 2010 GDP has been greater than expected. According to the 2011 Budget, the GDP of 2010 was 231.9 while according to ELSTAT, it was assessed at 230.2 billion. This decline has led to a change in the 2010’deficit by 0.1%.
b)    The deterioration in tax revenues (0.6% of GDP), due to a greater than expected recession in 2010’s last quarter.
c)    The balance deterioration of OTA, related to meeting past obligations at the end of the year.
d)    The deterioration of the financial results of OKA, since the increase in unemployment led to a reduction in social contributions.
e)    The deterioration in hospitals’ financial performance.

On the other hand, there is improvement in the balance of the reclassified utilities, and on a national basis adjustment of accrued interest.