Reply #6: Greek 2009 Deficit Was Wider Than Expected [View All]

LONDON—The European Union's official statistics agency Thursday said the Greek budget deficit in 2009 was wider than the government had estimated, and added that it has reservations about the accuracy of Greek budget data that may lead to further upward revisions.

In the first of its twice-yearly reviews of government finances in the 27-member bloc, Eurostat said the Greek government's budget deficit was 13.6% of gross domestic product last year. ...

The Greek government had estimated the deficit was 12.7% of GDP in 2009, although it has acknowledged that Eurostat's estimate may be higher because of differences in the way it accounts for surpluses in the state-run pension fund.

The new uncertainty on Greece's fiscal liabilities rattled the European currency and bond markets, with the euro slumping to $1.3370 from about $1.3400 within minutes of the news.

The cost of insuring Greece's sovereign debt against default using credit default swaps hit a fresh high again Thursday, as Greek five-year sovereign CDS rose to 5.5 percentage points for the first time. That means the annual cost of insuring $10 million of Greek sovereign bonds for five years has risen more to $550,000 from $518,500 earlier in the morning.

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