Greece to include black market in GDP

Brussels, September 30 :

Greece, whose ancient civilisation introduced the world to high class prostitutes in the sixth century BC, has at last decided to salute their contribution to society.

Athens has announced that its economy is 25 per cent bigger than thought thanks, in part, to the round-the-clock duties of the country’s prostitutes, who were known as hetairai in ancient times.

The Greek authorities are revising the country’s gross domestic product (GDP) after deciding that the black market should be included in the figures. Manolis Kontopyrakis, the head of the national statistics service, said, “The revised GDP will include some money from illegal activities, such as money from cigarette and drinks smuggling, prostitution and money laundering.” Greece’s economic output was Euro180 billion in 2005 and is expected to rise to Euro194 billion this year. The black economy is estimated at up to Eero60 billion, according to Reuters.

The new figures are the result of Greece’s determination to avoid a ticking off from the EU, which has the right to impose hefty fines on a eurozone country if its budget deficit rises above three per cent of GDP. By boosting the size of its economy the Greek deficit will fall from 2.1 per cent of GDP to 1.9 per cent. Without the change the deficit would have fallen from 2.6 per cent of GDP to 2.4 per cent, according to the London Financial Times.

Joaquim Almunia, the European monetary affairs commissioner, who is used to GDP revisions of one to two per cent is said to be wary of Greece’s action. His spokeswoman said yesterday that the new figures would need to be examined by Eurostat, the EU’s statistics agency. The move raised eyebrows in Brussels because Athens famously used false statistics to meet the Maastricht criteria, thereby allowing it to join the euro. Charles Grant, the director of the Centre for European Reform, said, “It is on the public record that the statistics used which allowed Gr-eece to join the euro were exposed as false. I remember the former European commi-ssion president saying in 1990s that Greece was not ready to join the EU in 1981.”

But Grant said Greece should be taken more seriously now. “There was a real transformation in the mid-1990s. They cleared up corruption and spent EU funds wisely. The announcement reminds me of the sorpasso a decade ago when Italy said that it had overtaken the UK because it was counting the black economy in its statistics. That was taken seriously but Britain is now way ahead of Italy.”