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EU stats office: Greek economy figures unreliable

January 12, 2010

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BRUSSELS—The European Union's statistics arm said Tuesday that Greece's public finance figures were unreliable and seem to have been fudged to play down the country's swelling budget gap last year.

Eurostat said the Greek statistical office NSSG had complained of political interference in the financial figures to be sent to the EU executive last October. The NSSG is currently controlled by the Greek finance ministry.

The agency also blamed poor bookkeeping for the poor quality of Greek statistics and said that it still had "a substantial number of unanswered questions" on spending for social security, hospital arrears and deals between the government and state-owned companies.

Revising figures for recent years could see Greece's current debt and deficit figures increase again.

Greece shocked bond markets and other EU governments in October when it announced that its 2009 deficit would be 12.5 percent, far above the 3.7 percent it estimated the previous spring.

Eurostat said there was "deliberate misreporting" in accounts, citing fudged figures for interest payments, EU grants, unpaid hospital debt and swaps write-offs that made the deficit appear smaller.

"The current set-up does not guarantee the independence, integrity and accountability of the national statistical authorities," Eurostat said.

It warned unless these problems were tackled, "the reliability of Greek deficit and debt will remain in question."

The European Commission will within weeks formally condemn Greece for breaking EU debt limits and will comment on the government's budget program to reduce debt over the next few years.