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 Testifying before a Parliamentary committee investigating claims that Greece's 2009 deficit had been deliberately inflated to pave the way for swingeing austerity cuts, Bank of Greece governor George Provopoulos on Thursday insisted that both main parties in the country had been fully aware of the risks of fiscal derailment before the 2009 elections. In potentially devastating testimony for the Pasok party, which won the 2009 elections with the slogan 'There is money' and promises of generous government spending, he said that he had personally informed the leaders of the two main parties of the emerging problem. He stressed that the statistics generated in the first months of 2009 were an early indication of the problems to come, being significantly larger than those in the previous year, while economic indices in the first half of the year were a warning bell that borrowing would soon become difficult. Though the Bank of Greece had repeatedly warned of the risk that the deficit could spin out of control, the appropriate measures were not taken and the leaders of the two main parties did not appear convinced, he added. Finally, when Greece sent two different tables of Excessive Deficit Procedure (EDP) data to Eurostat within the space of mere days from two different governments, it led the Ecofin Council to request that Eurostat carry out a detailed investigation into the weaknesses of Greek statistical methods, focusing on the state's transactions with social insurance funds, public utilities and hospitals. Replying to questions, Provopoulos insisted that the political system had been adequately informed about the dangers threatening the Greek economy before the elections, including the risk that the deficit would rise to a two-digit figure and that he had personally informed the leaders of the two main parties. Structural reform measures could have cut short the deficit's momentum and had a huge impact on markets, which would have been reassured to see the government taking measures, but this did not happen, Provopoulos added. Questioned about the infamous statement by then finance minister George Papaconstantinou, in which he compared Greece's economy with the Titanic, Provopoulos played down the impact this might have had on financial markets, noting that markets and institutional investors did not base their assessment of a country on a minister's statement, "however unfortunate". The Parliamentary investigation into the 2009 deficit was launched following allegations made to the press by a former board member of Greece's statistical authority Elstat, Zoi Georganta, that the country's public deficit for 2009 had been deliberately and artificially inflated under pressure from Eurostat and Germany. Greece's 2009 deficit was revised upward in November 2010, from 13.6 percent of GDP to 15.4 percent of GDP, making it the worst fiscal deficit in Europe. Georganta went public with her allegations after Elstat's entire board, with the exception of Georgiou, were summarily dismissed by Finance Minister Evangelos Venizelos in September 2011. (AMNA)
and around the horn in Greece with their top news items of the day...
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| A car drives through central Athens with balloons coming out of its window, 15 March 2012 (Reuters) |
 1. VENIZELOS Pasok's uncontested leadership candidate, Evangelos Venizelos, said his election campaign would "declare war on populism and hypocrisy," warning that violent protests and extreme ideology had to be faced down. The finance minister essentially launched his campaign, meeting journalists at the party headquarters, ahead of Sunday's leadership election. He warned that violent protest groups could target Sunday's primary-style vote. "There is a danger of symbolic or actual violence. Everyone is allowed to express their opinion, even in an intense way, but violence marks the limit of this right," he said. "The fascistisation of this society is a visible danger ... This way of thinking must be dumped in the rubbish bin of history." 2. PARTIES KNEW Both New Democracy and Pasok were fully informed of the country’s dire financial state before the 2009 elections, the head of the country’s central bank said on Thursday. Testifying before a parliamentary committee investigating claims that the country’s 2009 deficit was deliberately inflated to pave the way for swingeing austerity cuts, Bank of Greece governor George Provopoulos said he had personally informed the leaders of the two main parties of the emerging problem.
3. REICHENBACH The country has made progress in collecting tax arrears and putting EU funds to use, but it must do much more to cut red tape for businesses in order to get its economy growing again, a senior European official said on Thursday. "There is too much red tape, too many administrative barriers," Horst Reichenbach, head of the European Commission's special task force to help Greece implement reform, told a news conference in Athens. The country could boost its exports by as much as 10 percent if it were to cut the time it takes for products to get through customs from 20 days to the EU average of 10, he said. 5. RATINGS AGENCY Ratings agency Standard and Poor's says it will keep a default rating on Greece until its massive bond exchange deal is completed next month. S&P however assigned a junk-rating CCC on the new bonds issued on March 12 under Greek law, and said it would reassess the country's creditworthiness when foreign-law bonds are swapped on April 11. "Our sovereign credit ratings on Greece will remain at 'SD' until the exchange of Greece's non-Greek-law governed bonds is concluded, which we understand is to occur by April 11, 2012," S&P said. "Following the exchange, we will likely consider Greece's selective default to be cured and assign a forward-looking sovereign credit rating of CCC to Greece." 6. SIEMENS The government signed a contract with Siemens on Thursday for the construction of the signalling system for the new extensions of the Athens metro. The move means that the stations, which have been constructed, can now be completed after a delay of almost two years caused by the problems the state and the German company. Speaking at the contract signing, Infrastructure, Transport and Networks Minister Makis Voridis said: "I am quite pleased to say that today, with the signing of this contract, one of the policy commitments of the Papademos government is being fulfilled." 7. HELPLINE The SOS 15900 national helpline for women that are victims of violence received more than 5,000 calls and 37 emails asking for help during its first year of operation, according to figures released by the General Secretariat for Gender Equality. Of the 5,089 calls received, 76 percent concerned cases of violence with members of the opposite sex (3,955 calls). Of these 3,955 calls, approximately three quarters were made by the abused women themselves and another 997 by third parties, such as friends, parents, siblings, other relations, neighbours and others. 8. BENEFITS CENSUS Between 30,000 and 40,000 of the estimated 240,000 recipients of welfare benefits have failed to register in a census carried out at Citizen Service Centres (KEP). The deadline, which expires on Friday, was not met either because these individuals did not appear at all, or because they lacked the necessary supporting documentation, the health ministry revealed. The same sources noted that of the 700 people drawing a disability benefit for blindness on the island of Zakynthos, only 100 appeared before health inspection committees, of which 60 were discovered not to be blind after all.
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