Sunday

5th Apr 2020

EU on Greek statistics scandal: 'Never again'

  • British comedian Vic Reeves: '88.2% of statistics are made up on the spot' (Photo: Jorge Franganillo)

The EU commission has proposed new rules on how to shield national statistics bureaus from political influence, three years after Greece lied about its deficit, triggering its first bail-out and marking the start of the eurozone crisis.

Under the new regime, unveiled on Tuesday (17 April), EU governments will have to sign written pledges that they will not make political appointments in the sector and on the independence of national number-grinders more broadly.

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Failure to comply would lead to legal action at the European Court of Justice and potential fines, apart from the market turmoil that such a breach of confidence can trigger.

MEPs and member states still have to bless the scheme. But for his part, taxation commissioner Algirdas Semeta told press in Brussels: "We want to ensure that, [that] never again, will we have any political influence on our statistics."

He noted that the crisis shows the importance of reliable figures for taking "painful decisions" on budget cuts and for market creidibility: "It is not enough that statistics offices are independent and produce quality data - but also that they are perceived as such."

Eurostat - the Brussels-based commission body which pools member states' - had been calling for several years before the Greek fiasco for extra powers to double check national information. But it took the Greek development to prompt action: under parallel rules on economic governance agreed last year, member states already said that countries which manipulate figures can be fined up to 0.2 percent of GDP.

Semeta said on Tuesday that Athens backs all the reforms. But a legal case in Greece against Andreas Georgiou, the director of its national bureau, Elstat, indicates the contrary.

The former International Monetary Fund official recruited in 2010 to clean up Elstat is under investigation for "breach of faith against the state" for allegedly overstating the 2009 deficit in November 2010 when he revised the number upward to more than 15 percent of GDP.

Meanwhile, hidden deficits recently resurfaced in Spain, where the new government of centre-right Prime Minister Mariano Rajoy said the gap for 2011 is in fact bigger than previosuly stated at over eight percent.

Rajoy last month persuaded fellow EU governments and the commission to give him more elbow room for the 2012 target due to extraordianry problems with recession and joblessness. But markets are punishing Madrid by driving up borrowing costs to levels approaching the bail-out stratosphere.

Semeta declined to comment on the Spanish statistical correction until Eurostat publishes its latest deficit findings on 23 April.

One commentator believes that nothing will change unless national bureaus face even more scrutiny than envisaged in Tuesday's paper, however.

"Ultimately, you need much stronger supervision by Eurostat over national statistics offices. Also, they should stress the anti-corruption powers of Olaf [the commission's anti-fraud office]. There should be an equivalent of Olaf in every member state, tracking down those corrupt behaviour patterns, rather than focusing solely on figures," Piotr Kaczynski from the Brussels-based think tank, the Centre for European Policy Studies, told this website.

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