(2004/C 78 E/0209)

WRITTEN QUESTION E-2982/03

by Mihail Papayannakis (GUE/NGL) to the Commission

(9 October 2003)

Subject:   Stability pact

In reply to my Oral Question H-0564/01 (1) to the Council on the Greek stability and development programme I was informed that ‘on 12 February 2001, the Ecofin Council discussed Greece's initial stability programme which relates to the 2000-2004 period (...). The Ecofin Council was of the opinion that, under normal circumstances, the budget estimates provide sufficient guarantees against exceeding the shortage threshold of 3 %’.

It has been reported that, after carrying out exhaustive checks on the budgets for projects in connection with the Olympic Games in cooperation with the ‘Athens 2004’ organisation, the Greek Government has now concluded that an additional sum of around EUR 2,3 billion will be required in 2003-2004 to complete the projects. To what extent does the Commission believe that Greece will not exceed the safety margin and that its deficit will remain stable? Does the Commission still take the view that Greece has not deviated from the constraints set by the stability pact in the two years that have passed since the Ecofin Council first assessed Greece's financial situation?

Answer given by Mr Solbes Mira on behalf of the Commission

(4 November 2003)

The Commission is closely monitoring developments in the Greek public finances all the more that the increasing costs of the preparations for the Olympics as well as the cost of the announced social package seem to add significant pressures to the State budget. In fact, the Greek Government has recently revised the figure for the general government deficit to 1,4 % of the gross domestic product (GDP) in 2003. In spring, the Commission forecasted the government deficit at 1,1 % of GDP in 2003 and 1,0 % of GDP in 2004. Recent developments imply that these estimates will be certainly revised in the Commission Autumn forecasts, which, however, are not completed as yet. Under these circumstances, it is certain that the Commission will examine with the closest attention budgetary developments in Greece in case clear signs of deterioration would emerge; it should be reminded that the Council in its Opinion on the 2002 updated stability programme (January 2003) recommended to Greece to implement stronger and more robust medium term budgetary adjustment; it was stressed that this effort was required taking into consideration the still very high level of the government debt and its insufficient decline in the recent years.

(1)  Written answer of 4.7.2001.