WRITTEN QUESTION E-0231/03 by Antonios Trakatellis (PPE-DE) to the Commission. Input of Community resources into the Greek economy.
Date: 2003-02-04
Institutions: European Parliament, Provisional data
Subjects: EU financing, EU statistics, Greece, economic consequence, economic development, economic statistics, gross domestic product

C 280 E/42

Official Journal of the European Union

EN

21.11.2003

Does the Council not believe that the time has come to address the failures, and disastrous consequences,
that prohibition is provoking in producer and consumer countries alike and initiate at the upcoming
ministerial segment of the UN Commission on Narcotics, scheduled for 16 and 17 April 2003, a process
of revision of the three international Conventions on Narcotic and Psychotropic Substances in order to
promote a more effective pragmatic approach to the drug question?

Reply

(21 July 2003)

The situation in Bolivia to which the Honourable Member of Parliament refers has not been discussed in
the framework of the Council. The theme of crop eradication and alternative development will be
discussed at the forthcoming high level meeting on drugs of the European Union with the Andean
Community on 26/27 May 2003 in Cartagena de las Indias as well as in a broader framework at the Fifth
High Level meeting of the coordination/cooperation mechanism on drugs EU/Latin America/Caribbean on
29/30 May in the same city.

As regards a process of revision of the three international conventions so far no such an initiative has been
discussed in the framework of the Council.

(2003/C 280 E/043)

WRITTEN QUESTION E-0231/03

by Antonios Trakatellis (PPE-DE) to the Commission

Subject: Input of Community resources into the Greek economy

(4 February 2003)

Commission estimates and data relating to the Greek economy (updating of the stability programme for
2001 and 2002) show that the rate of growth of GDP in Greece was 4,10 % in 2001. This is presented as
evidence of the ‘good’ performance of the Greek economy compared to the EU average. However,
according to the Commission report drawn up by the Budget Directorate-General in September 2002, the
input of Community resources into Greece amounted to 3,50 % of the GDP for 2001 and 3,65 % for
2000. The corresponding figures relating to the contribution made by the input of Community resources
to GDP for 2001 for other Member States of the European Union given in this report were as follows:
Portugal: 1,53 %, Ireland: 1,13 % and Spain: 1,24 % of GDP. This means that the growth of GDP in Greece
derives essentially from a redistribution of EU budget resources, since, according to Commission statistics,
Community input of all kinds (cid:1) Structural Funds, Cohesion Fund, European Agricultural Guarantee and
Guidance Fund and European Social Fund, etc. (cid:1) amounted to 85,4 % of the growth in the GDP of Greece
in 2001.

1.
Can the Commission confirm that the input of Community resources in Greece corresponded to
3,50 % of GDP in 2001 and 3,65 % in 2000 and that the 4,1 % increase of Greek GDP in 2001 is due
almost entirely to the input of Community resources?

2. What contribution has the Community budget made in the growth of Greek GDP in 2002 and what
amounts of these funds entered Greece in the same year?

On the basis of the data available, what are the multiplier effects of such a significant transfer of

3.
Community funds to the Greek economy for 2000, 2001 and 2002?

On the basis of the data available, what is the potential for the Greek economy to continue growing

4.
under its own impetus after the expiry of the third CSF in 2006?

21.11.2003

EN

Official Journal of the European Union

C 280 E/43

Answer given by Mr Solbes Mira on behalf of the Commission

(13 March 2003)

As one of the Union’s poorer Member States (with Gross domestic production (GDP) per capita in
purchasing power standards (PPS) at 68 % of the 15 Member States average in 2001), Greece is a net
recipient from the Union budget. The net budgetary balance was approximately 3,5 % of GDP in 2001.
The main sources of
funds are the European Agriculture Guidance and Guarantee Fund (EAGGF)-
Guarantee Section and Structural Operations. Payments to Greece in 2000 and 2001 were not noticeably
higher than in previous years, relative to GDP, as shown for Structural Funds payments in Table 1.

Table 1
Structural Funds payments as a percentage of GDP

1994

1995

1996

1997

1998

1999

2000

2001

Greece

2,41

2,17

2,17

2,47

2,97

1,94

2,27

2,25

Spain

0,77

1,36

1,30

1,29

1,30

1,31

0,84

1,10

Ireland

Portugal

1,72

2,08

2,09

1,71

1,91

1,20

0,81

0,55

2,91

2,95

3,35

3,13

3,21

2,87

2,08

1,60

Source: Court of Auditors and DG Budget.

The main aim of the supply-oriented Cohesion policy is not to stimulate short-run demand but to raise
long-run productivity and competitiveness. Nevertheless, public investment supported by Union Structural
Funds translates into increased domestic demand. The contribution of domestic demand to GDP growth
can however be dampened by a negative contribution of the foreign balance, not least via imports of
goods and services, mainly from other Member states, including equipment goods which contribute to
raising the long-run productivity and growth potential of the economy. In Greece, in 2002, real GDP
growth was driven by strong domestic demand, namely sustained private consumption and both public
and private investment, while the contribution of the external balance was negative due to the impact on
exports of a slowdown of world demand and a recovery of imports.

In the context of the Second Cohesion Report in January 2001, an evaluation was made of the potential
impact of the Structural Funds on GDP in the Cohesion countries in 2000-2006. The macroeconomic
model used, Hermin, not only assesses short-run demand side effects, but also potential long-run effects on
the economy’s supply potential i.e. investment in human capital and infrastructure are assumed to raise
productivity, to increase an economy’s attractiveness to Foreign direct investment (FDI), and to improve
the competitiveness of
the Community Support
indigenous industries. The evaluation showed that
Framework could raise real GDP by about 5-6 % in 2000-2006, compared to the baseline scenario. Even if
long-run supply effects continue at
the artificial assumption is made that funding stops after 2006,
around 2 %.

Although Greece’s good growth performance since 1996 is partly due to the impact of Union co-financed
public investment, other policies have also been crucial, particularly the mix of monetary, fiscal and wage
moderation policies which allowed Greece to enter the eurozone and have provided positive conditions for
private investment. The 2002 update of
the stability programme of Greece, prepared under the
requirements of the Stability and Growth Pact, shows that real GDP growth is expected to remain above
the Union average in the coming years. Longer term growth prospects will clearly depend on the pursuit
of stability-oriented macroeconomic policies, not least to ensure the sustainability of public finances, as
well as steps to improve the functioning of product and labour markets in order to sustain investment
flows. On several occasions, the Commission and Council have recommended that such policies are indeed
implemented by the Greek government.