Greece Blames Olympics for Rising Deficit

Fri Mar 18, 2005

By DEREK GATOPOULOS, Associated Press Writer

ATHENS, Greece - Greece's conservative government blamed massive Olympic costs and the previous socialist government for its ballooning deficit, which reached 6.1 percent of gross domestic product in 2004, according to a provisional figure announced Friday by the European Union's statistical body, Eurostat.

The government already has received a warning from the EU for exceeding the 3 percent cap on budget deficits for nations that use the euro.

Eurostat said it still has problems with Greek data that could result in upward revisions to deficit figures -- noting that Olympic expenditures are "not yet final" -- while the EU's executive Commission said Greece would have to cut spending by more than anticipated.

The finance ministry has yet to announce the Olympic price tag, but has indicated the cost of the Athens Games would climb to about 9 billion euros (nearly $12 billion), by far the most expensive ever.

Greece had initially slated 4.6 billion euros ($6.2 billion) as the total cost for the games, but increased spending for security and last-minute completion of delayed venues.

In a terse statement, the Finance Ministry blamed "irresponsible accounting" by the previous socialist government and the Olympic cost overruns.

"We assumed an inheritance of recklessness ... of unrecorded debts and expenditures for the Olympic games," it said.

Premier Costas Caramanlis' conservative government, which came into power last March, had predicted a 2004 deficit of 5.3 percent.

Greece will present a revised proposal to the EU on March 30 on how it plans to reduce the deficit below the EU limit by the end of next year.

"The burdens we face from the past are very large ... We have chosen the road of transparency and responsibility," Caramanlis told parliament Friday.

Opposition leader George Papandreou said the government had made arbitrary revisions to backtrack on promised welfare spending hikes.

"They started this fire so they could claim they inherited scorched earth. But they cannot control this fire which is consuming our national wealth," Papandreou said.

"The lack of responsibility Mr. Caramanlis has shown is indescribable ... he has behaved toward the economy like a common arsonist."

The Socialists governed Greece between 1981 and 2004.