– German Official: No EU, Bilateral Aid For Greece On EU Agenda (Wall Street Journal)
Goldman’s Erik Nielsen lands the bombshell that the Greek deficit mysteriously increased from €29.4 billion to a shopping €37.9 (keep in mind, this is not Bernanke notation where only quad- prefixes impress people at this point).
This increases the (running) 2009 budget deficit from 12.2% to 16%!
While certainly not the last time we hear of “prior revisions”, the question of just how patient Germany will be, should this number approach, oh say, 50% once the artificial support of various Goldman swaps expires (and at 50% the BSDs like Goldman will surely round up to 100%), is very much open.
From Goldman’s Erik Nielsen
Big revision up in their 2009 fiscal deficit: Late yesterday, the Greek finance ministry amended its website for its 2009 fiscal cash execution, adding close to EUR 6bn to expenditures in December for a total of EUR 11.8bn, which takes the full-year deficit to EUR 37.9bn – up from EUR 29.4bn reported previously. This implies an increase in their 2009 central government budget deficit from about 12.2% of GDP to about 16% of GDP. There has been made no explanation for this revision, but we think it may be associated with payment of arrears to hospitals, which means that the general government deficit may have increased by less. Regardless, given the uncertainties, it is a stunning revision to make to the December payments without an explanation. Hopefully, it’s a good use of money, like clearance of arrears, but it would be good to know.