(Watch the Germans finally balk over the weekend)
1 Sep, 2011, 07.27PM IST, AFP
Greece red-faced after leaked debt warning
ATHENS: The Greek finance ministry was on the defensive on Thursday after a new budget watchdog released an internal report warning that debt was “out of control” just as officials held critical talks with creditors.
Finance Minister Evangelos Venizelos, who had enough troubles this week explaining Greece’s reform delays and target slippage to auditors from the EU, the IMF and the ECB, attributed the error to inexperience.
“All responsible international organisations know in which way macroeconomic and fiscal reports are compiled, checked and published,” Venizelos said in a statement.
“It is clear that the budget office still lacks this knowledge, experience and responsibility,” the minister said.
The report, excerpts of which were reported by the semi-state Athens News Agency on Wednesday, warned that the dynamic of Greece’s enormous debt is “out of control”.
It said that slippage on meeting deficit targets, exacerbated by a deep recession, threatened to cancel out the benefits of a new EU bailout.
“A significant debt increase, a high primary deficit and the deep recession have boosted to the extreme the debt dynamic, which is now out of control,” the newly-formed State Budget Execution Monitoring Office, staffed by independent analysts, said in a report.
“These developments seem to offset to a great extent the positive impact” of the latest EU loan package of 159 billion euros ($229 billion) agreed last month, it added.