Greece Safe In Eurozone Despite Dodgy Data: E.U.

BRUSSELS (AFP) - Greece is safe in the eurozone despite revelations that it has been mis-reporting sensitive economic data for years, European Union officials said.
The EU's executive commission threatened legal action after drastic revisions showed that the Greek budget deficit has been far in excess of EU limits ever since the country joined the eurozone.
The scale of the revisions has already set off political controversy in Greece and an expression of deep concern by European Central Bank president Jean-Claude Trichet.
But the Greek government has stressed that the changes do not call into question Greece's entry to the eurozone in January 2001, a position backed by officials in Brussels.
European Commission spokesman Gerassimos Thomas said EU member states had taken the decision in 2000 to admit Greece as the area's 12th country in good faith.
"I don't think there is envisaged any kind of possibility to reopen these kinds of decisions," he said.
But there was no doubting the alarm felt for the credibility of the eurozone after the EU's data agency Eurostat said the Greek deficit from 2000 to 2003 was massively over previous figures given by Athens.
"The revisions are of a size and scope that is causing real worries to the commission," EU economic commissioner Joaquin Almunia said.
Eurostat said it would send a mission to Athens to analyse the Greek budget books over 1997-1999, the period leading up to the country's accession to the eurozone.
The revisions began to flow when a new, conservative, government took office in Greece in March and ordered an audit of the budget figures reported by the previous Socialist administration.
"We took over a difficult economic situation and we will succeed" in turning it around, government spokesman Theodore Russopulos said Wednesday when Athens first confirmed the huge revisions.
Under the Socialists, Eurostat indicated, Greece seriously under-reported military expenditures and over-estimated its social-security surplus.
Last year, Greece had far less tax revenues and EU structural-fund handouts than first thought, while the accounting reclassification of a payment from the postal savings bank to the government also blew out the deficit.
The upshot, Eurostat said, was that the Greek deficit in 2000 was 4.1 percent of output, 3.7 percent in 2001 and 2002, and 4.6 percent last year -- all beyond the EU ceiling of 3.0 percent.
In comparison, the deficit figures given by Athens and relayed by Eurostat as recently as March were 2.0 percent for 2000, 1.4 percent in 2001 and 2002, and 1.7 percent last year.
Greece was already facing EU disciplinary measures after confirming its deficit was way beyond the 3.0 percent target last year.
The revelation that in fact Greece has never managed to get under the limit since adopting the euro is a serious embarrassment all round, casting grave doubt on the reliability of national statistics reported to the EU.
"It's a real problem, an enormous problem," Trichet said at a European Parliament hearing, referring to the Greek statistics.
Eurostat director-general Michel Vanden Abeele appealed to EU member states to give the Luxembourg-based agency more resources so that it can properly audit national accounts.
Eurostat should also have the power to launch surprise raids at government and statistical offices in a member state.
"We can't rely on declarations which could change with the wind," Vanden Abeele told a news conference.
However, he rejected any notion that Athens had lied over its data to gain entry to the eurozone.
"I will never use this word. We are in confidence with national administrations and we will never accuse anybody to lie."