Greece's new finance minister promised radical measures on Tuesday to cut the country's ballooning budget deficit and fix its statistical reporting, which has been harshly criticised by the European Union.
George Papaconstantinou, whose Socialists won a general election this month, said he would bring Greece's budget deficit into single digits in 2010 from this year's expected 12.5 percent, partly thanks to an overhaul of the tax system.
"We plan to start consolidation (of public finances) in 2010, it will be structural, not one-off measures," Papaconstantinou told a news conference during a meeting of EU finance ministers.
"We plan a new law by February next year, it will change the fundamental mechanics in the tax collection system, which has unfortunately collapsed in the last few months," he added.
Separately, Greece's central bank urged the government to cut its budget deficit by around 5 percent of its GDP by the end of 2011 to avoid a sluggish recovery from the economic crisis. [ID:nLK344448]
Greece has faced harsh criticism from fellow EU countries and the European Commission when it recently doubled its 2009 budget deficit forecast to 12.5 percent, raising another question mark over the reliability of its statistics.
Budget deficits have swollen everywhere in Europe as the economic crisis prompted an increase in stimulus spending, but nowhere has the scale of change been as big as in Greece.
"The game is over — we need serious statistics," Jean-Claude Juncker, chairman of the Eurogroup of finance ministers said late on Monday.
Greek governments and the country's statistical office have significantly revised their numbers several times in the past.
Papaconstantinou pledged to improve the quality of statistical reporting. He added the previous government had omitted certain items when counting the deficit.
"We intend to move with specific measures to ensure that these kind of problems are dealt with," he said.
He said his government would grant "the national statistical service independence and move it away from close relationship to policy-making for all of us to have more faith in the numbers."
He reiterated he would like to bring Greece's budget deficit below the EU's ceiling of 3 percent of GDP in 3-4 years.
With economic contraction expected at 1.5 percent in Greece this year, Papaconstantinou said the governments' borrowing needs may be slightly higher than 62-63 billion euro expected so far. "There will be a need for additional borrowing, we will be very careful," he said.
