Thursday

1st Dec 2022

Greek experience to spur EU request for audit powers

Frustrated by the ongoing story of Greece's public finance problems, the European Commission has indicated it will seek audit powers for the EU's statistics office, Eurostat, in order to verify elements of national government accounts.

EU member states have increasingly queried the reliability of statistics leaving Athens after the country's newly elected Socialist government raised its 2009 deficit forecast last October by more than four percentage points to 12.5 percent of GDP.

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  • Analysts say the Greek statistics system is in ruins (Photo: Titanas)

The following month saw the figure rise to 12.7 percent, while a damning report issued by the European Commission last week talked of "severe irregularities" in Greek statistics that left the accuracy of the estimate still in doubt.

Speaking to journalists after a meeting of EU finance ministers on Tuesday (19 January), outgoing EU economy commissioner Joaquin Almunia said greater Eurostat auditing powers could have avoided the mistakes that led to the Greek revision.

He said the commission will propose "a new regulation in order to obtain powers, which we've already requested, to give Eurostat the possibility of carrying out audits."

In 2005, the EU executive body made a similar request for Eurostat auditing capabilities but was rebuffed by member states, who were reluctant to hand over power to the Luxembourg-based body.

After years of nasty surprises surrounding Greece's public finances, many in Brussels now feel a top-to-bottom reform on the country's statistical system will be needed before reliable data can be produced.

October's budgetary revision prompted market panic and credit rating cuts as investors mulled the possibility of a Greek sovereign default, with potential knock-on effects to other EU states leading to questions over the viability of the euro.

Greek finance minister George Papaconstantinou presented his country's latest deficit cutting plans to colleagues at Tuesday's meeting, but analysts question the governments ability to push forward the necessary reforms to bring the country's deficit below three percent, as required under EU rules, by 2012.

Swedish proposal

While discussion on Greece took up considerable time, EU finance ministers did have an opportunity to discuss a Swedish proposal for an EU-wide bank levy to mitigate the effects of future financial crises.

Swedish finance minister Anders Borg explained to colleagues how a new national tax, charged according to bank's liabilities, aimed to accumulate funds worth 2.5 percent of GDP by 2025 in a special stability fund.

British, Belgian and German ministers were amongst those who showed moderate support for the idea. However, outgoing EU taxation commissioner Laszlo Kovacs said it was unlikely to fly because of EU unanimity voting in the area of taxation.

"I wouldn't bet a lot of money on the introduction of this new tax," said Mr Kovacs. However, he expressed his satisfaction that the ministers had reached the modest achievement of agreeing to draft rules to facilitate collecting taxes across EU borders.

EU report slams Greece over false statistics

A report published by the European Commission on Tuesday has condemned Greece for falsifying its data on public finances, citing "deliberate misreporting of figures by the Greek authorities in 2009."

ECB says more rate hikes to come

European Central Bank president Christine Lagarde said more rate hikes will come, but also admitted a recession will not lower inflation — leaving some economist question the logic of the policy.

Investigation

Asbestos — two to three times more deadly than known

Where once working men in heavy industry were diagnosed with cancers related to a more direct exposure to asbestos, now women in professions such as teaching, nursing and other occupations are being diagnosed, as well as young people.

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