Local view for "http://purl.org/linkedpolitics/eu/plenary/2003-02-11-Speech-2-213"
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"en.20030211.10.2-213"2
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The ratio of debt in Greece is one of the highest in the Community. It increased up until the middle of the 1990s, reaching a peak of over 110% of GDP in 1996. This was the result of increasing budgetary imbalances and low growth in GDP.
The stabilisation efforts with a view to participation in Monetary Union and the improvement in the main macroeconomic indicators have contributed to reducing the ratio of debt, although at a very slow rate. The debt still represents 107% of GDP in 2001.
Three factors have influenced this development: the level of primary balance, that is, excluding financial payments, the nominal rate of growth of GDP and other autonomous or residual factors. Notable amongst those are the financial operations which do not affect the budgetary balance but the volume of debt. In fact, the high rate of adjustment of the volume of debt, which reached 7.1% of GDP in 2001 – and is estimated as 4% of GDP in 2002 – meant that the evolution of the debt ratio does not entirely reflect the evolution of the budgetary situation of the public administrations, the achievement of increasingly high primary surpluses or the growth in GDP.
Furthermore, the evolution of public debt, as laid out in the Greek stability programme in 2002, has been partially affected by the review of the statistical methods used in different financial operations. That review was carried out in accordance with the system established by Eurostat in order to comply with the conditions set in the ESA 95, in our European system of national accounts.
The statistical review which was carried out in 2002 led to an increase in Greece’s debt ratio in 2001, which rose to 7% of GDP higher than the figure previously estimated. Bearing in mind the new budgetary perspective arising from this review, the updated stability programme foresees a reduction in the debt ratio equivalent to 1.7% in 2002, forecasting an acceleration of this reduction after 2003, with a reduction of approximately 0.4% until the end of 2006. In fact, from 2003, the modification of the debt ratio will correspond better to the level of primary surplus.
In accordance with the Commission’s economic forecasts of last autumn, Greece’s ratio of debt should decrease until the end of 2004, although at a slower rate than that forecast in the 2002 stability programme.
For the period following 2004, when the updated stabilisation programme allows a certain decrease in real production growth, it will be necessary to apply a credible strategy of budgetary adjustment in order to be able to guarantee this reduction in the debt ratio laid down in the programme.
In this regard, the greater transparency of the public accounts achieved as a result of their recent review has increased their credibility and also that of the strategy of budgetary adjustment, laid out in general terms in Greece’s stability programme."@en1
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