Europe News

EU 'window-dressing' Greece figures: Ifo

EU's Greek data is 'dishonest': Ifo's Sinn

The head of the Munich-based Ifo Institute for Economic Research has accused the European Union of meddling with the figures for Greece's public finances to portray a rosier picture ahead of the 28-country bloc's crucial elections.

Ifo President Hans-Werner Sinn said said in a statement Wednesday: "The European statistical office removed from its database the usual data on Greece's public deficit excluding interest payments (primary balance) a couple of days ago.

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"In this way, the European institutions are following the strategy of embellishing the financial situation of the crisis countries prior to the European Parliament elections. In truth, Greece is still far from regaining financial health."

Greece this week asked its fellow euro zone countries for a reduction in its debt repayments, bringing the matter up at Monday's meeting of the region's finance ministers in Brussels.

According to an agreement dated November 2012, discussions on debt reduction would start once Greece reached a primary surplus – when the government's income exceeded its outgoings. Last month, Eurostat confirmed that Greece had reached a primary surplus of 0.8 percent of gross domestic product (GDP) for 2013.

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Eurostat responded to the Ifo Institute's chief's accusations by stating that it removed the statistical primary deficit data from the database because it was not part of the data used to determine an excessive deficit.

Sinn responded in a statement with:"This is just a sleight-of-hand."

After a six-year recession, Greece is expected to see economic growth of around 0.6 percent this year, according to euro zone estimates, but that follows an around 5 percent contraction last year. In two years' time, the economy could grow by as much as 3.3 percent, according to the government's economic projections.

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The country recently also held its first successful bond auction in four years.

However, the country isn't out of the woods yet. Greece has the highest unemployment rate in the region at 26.7 percent, with youth unemployment, or for the 15-24 age group, a staggering 56.8 percent.

Sinn accused the European Commission, the EU's executive arm, of "politically motivated doctoring of the figures."

"If one follows the Eurostat directions, one arrives again at the 8.7 percent deficit in the primary balance, and not at a 0.8 percent surplus, as a European Commission spokesman calculated in late April," Sinn said.

In an interview with CNBC on Wednesday, the CEO of the Greece's largest domestic bank, Pirareus, said that Greece was finally emerging from its recession and the odds were in favor of not just an economic recovery but also solid investment returns ahead.

"The opportunity in Greece has not run its course. We're just starting to get into positive growth territory and that will produce returns which some investors may wish to partake," Anthimos Thomopoulos told CNBC in an exclusive interview.