Painful numbers out from Eurostat on European fiscal deficits on Thursday: the statistics agency revised Greece’s fiscal deficit upwards by a full percentage point and cast doubt on the quality of data provided by the Hellenic Republic.
Not the best mood music for a Greek debt rescue, then.
From the Eurostat report, emphasis ours:
In 2009 the largest government deficits in percentage of GDP were recorded by Ireland (-14.3%), Greece (-13.6%) the United Kingdom (-11.5%), Spain (-11.2%), Portugal (-9.4%), Latvia (-9.0%), Lithuania (-8.9%), Romania (-8.3%), France (-7.5%) and Poland (-7.1%). No Member State registered a government surplus in 2009.
Greece’s finance ministry had planned its recent austerity programme starting with a presumed 12.7 per cent deficit in 2009, as the WSJ reported. Above all, this warning will rankle in Athens:
Greece: Eurostat is expressing a reservation on the quality of the data reported by Greece, due to uncertainties on the surplus of social security funds for 2009, on the classification of some public entities and on the recording of off-market swaps. Following completion of the investigations that Eurostat is undertaking on these issues in cooperation with the Greek Statistical Authorities, this could lead to a revision for the year 2009 of the order of 0.3 to 0.5 percentage points of GDP for the deficit and 5 to 7 percentage points of GDP for the debt.
So we could be looking at a fiscal deficit of 13.9 to 14.1 per cent of GDP.
Worth remembering that the European Commission condemned Greece back in January for deliberately falsifying its economic data.
None of this will help doubts over whether a loan by the eurozone and IMF would help Greece’s long-term solvency, which are mounting just as Athens reaches the cusp of asking for a rescue.
The yield spread on Greek and German bonds had reached a new 12-year record of 535 bps as at pixel time after Eurostat’s data, according to Reuters.
Here’s Eurostat’s more detailed breakdown of Greece’s finances [click to enlarge]:
Ouch. Long-term, Greek, ouch. Not that many AAA sovereigns are doing better.
Related links:
Greece – ‘It’s not that different’ – FT Alphaville
A Greek on Greece - FT Alphaville