November 10, 2009 / 10:45 PM / 8 years ago

ECB's Trichet lays into Greece over statistics

ATHENS, Nov 9 (Reuters) - European Central Bank President Jean-Claude Trichet criticised Greece for producing unreliable statistics, saying they undermined the functioning of the euro zone’s growth and stability pact.

Speaking on Greek television, he also called for Athens to set up a fully independent statistics agency and said the country needed a very significant fiscal readjustment after recent warnings from the EU on a budget gap ballooning into double figures as a percentage of GDP.

The new Greek government said last week that the highly indebted country’s deficit would reach 12.7 percent of GDP in 2009, more than double what the previous cabinet had projected, prompting an outcry in EU capitals and among rating agencies.

“We absolutely need to be sure about the figures in the future,” Jean-Claude Trichet told Antenna television.

“We cannot have data which is not reliable, this calls into question the functioning, the good functioning, of the stability and growth pact, of the peer monitoring among Eurogroup members,” he said in the interview recorded in French on Thursday and aired on Monday evening.

“There is a problem of credibility,” he said.

Trichet said the Socialist government, which won an Oct.4 election, needed to guarantee the independence of the country’s statistics office.

“We need -- and I believe the new Greek government is willing to do so -- the statistics office to be totally independent, so that the figures can be reliable.”

Greece’s new government pledged in its 2010 draft budget last week to save the country from bankruptcy, while announcing that the public debt would explode to 120.8 percent of GDP next year, making it the euro zone’s most indebted country [ID:nL5323580].

It blamed this year’s fiscal derailment on over-optimistic tax revenue projections by the previous government and on spending excesses in the pre-election period. [ID:nLU308979]

Greece has a long history of budget revisions. The latest revision of the deficit figure was one of the main reasons for Fitch to cut the country’s rating to A- last month and for Moody’s to put its A1 rating on review for possible downgrade.

Asked about what Greece should do to stem its ballooning budget deficit, Trichet said:

“It is clear it needs a very serious rectification programme. Things cannot continue like that,” he said.

Writing by Ingrid Melander; Editing by Patrick Graham

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