BRUSSELS- The European Commission is likely to launch infringement proceedings against Greece for failing to provide reliable statistics on its budget deficit and debt, an EU source with knowledge of the proceedings said on Tuesday.

The Commission, the European Union's executive arm, is responsible for upholding EU law. It had already once launched proceedings against Greece for unreliable deficit statistics in 2004, but closed them in 2007.

There will probably be another infringement procedure... because providing timely and reliable statistics is an obligation under EU law and they have failed in their obligation, the EU source said.

Greece revised its 2008 budget deficit to 7.7 percent of gross domestic product from 5.0 percent reported in April and also revised its 2009 budget deficit forecast to more than 12 percent of GDP from 3.7 percent forecast in April.

A Commission report officially released by the EU's statistics office Eurostat on Tuesday underlined reservations about past Greek data, saying Eurostat had questioned figures five times between 2005 and 2009.

Full report, on which Reuters broke news on Monday, at: >here

Over the last eight years, whenever the Greek (debt and deficit) data have been published without reservations, this was very often the result of Eurostat interventions before or during the notification period in order to correct mistakes or inappropriate recording, the report said.

It said Eurostat could not verify the 2008 deficit numbers because of the lack of reliability and shortage of supporting evidence for the figures.

It also said that Greek institutions involved in the preparation of statistics were susceptible to political interference and did not guarantee the professional independence and full accountability of statistics.

Unless the institutional weaknesses uncovered during the investigation of the irregularities underlying the 2009 notifications of data are corrected and proper checks and balances introduced, the reliability of Greek deficit and debt data will remain in question, the report said.

REFORM

Greece, under a new government which took office after the October 4 election, said in November it planned to grant its statistics office full independence and create a commission to investigate shortcomings, with officials from the EU's statistical office Eurostat helping out.

But the Commission report said political interference may have continued with the new government too.

In the period between 16 and 21 October, the General Secretary of the NSSG (Greek statistics office) repeatedly contacted Eurostat claiming political interference over the provision of figures and with the sending of a revised notification, the report said.

The General Secretary Manolis Kontopyrakis had been appointed to his post by the Greek conservatives defeated in the elections who have been blamed with the unreliable statistics. He has since resigned.

(Additional reporting by Dina Kyriakidou in Athens)

(Reporting by Jan Strupczewski, editing by Patrick Graham)

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