Olympics leave Greece with hefty debt
(Agencies)
Updated: 2004-08-24 21:06

Greece pledged to redress its finances one day after official figures showed that Olympics-related costs pushed Greece'spublic debt, already one of Europe's biggest, to new depths.

"There is a budgetary problem, and it will be dealt with," the country's Finance and Economy Minister Yiorgos Alogoskoufis told private radio station Flash.

On Monday, Greece's accounting office showed Greece's public debt for the first half of 2004 rising by 10 percent year-on-year to 195.7 billion euros (240 billion dollars) -- well above 100 percent of the country's gross domestic product (GDP).

Much of the increase is due to borrowing incurred between April and June for the timely completion of infrastrucutre for the August Athens Olympics, according to ministry officials.

But building-up of cash reserves and not-Olympics-related spending unaccounted for in previous government budgets also accounted for a big chunk of the rise, according to ministry officials.

"The numbers are a bit exaggerated because we have borrowed to increase cash reserves," Alogoskoufis said Tuesday.

Greece's finances are an object of controversy between the conservative government and its socialist predecessors who were voted out of office in March.

The new Greek government has repeatedly revised upwards Greece's public deficit and debt figures to levels well above limits allowed in the eurozone, of which Greece is a member.

According to latest official figures, which are still subject to revision, Greece' public deficit for 2003 exceeded the EU-prescribed limit of three percent of output and Brussels has launched an excessive deficit procedure against Greece.

The Athens Olympics could cost Greek taxpayers more than seven billion euros, according to the latest government estimates.