The European Commission has said that it has received commitments from Greece to tackle the “huge” problem of corruption in the county.

José Manuel Barroso, the president of the European Commission, said the country would crack down on corruption as part of efforts to reduce its ballooning budget deficit.

Georgios Papandreou, the Greek prime minister, had recognised that serious corruption existed at “all levels in the administration”, Barroso said.

He added that Papandreou had promised to “suppress” two of Greece’s five tiers of public administration in order to both tackle corruption and reduce state expenditure.

Presenting his views on how to improve the EU’s competitiveness and growth, Barroso made another veiled reference to problems in Greece.

“We don’t have enough sophistication on spending,” he said. “It makes a difference if it [public money] is spent on bureaucracy or on improving competitiveness.”

Greece shocked financial markets in October when it raised its estimate of its budget deficit for 2009 from close to 3% of gross domestic product (GDP) to 12.5%. Its current estimate is 12.7%.

The EU’s stability and growth pact requires EU member states to keep their deficits within 3% of GDP.

The country’s problems were compounded this week when Fitch, a credit rating agency, reduced Greece’s rating to BBB+. Standard & Poor’s, another ratings agency, has warned that it is also considering downgrading Greece’s sovereign debt.

Papandreou gave a presentation last night to other EU leaders of measures he intends to take to bring the deficit down. A Greek diplomat said that Papandreou had stressed both his commitment to tackling corruption, and to structural reforms.