21st Nov 2019

Spain faces fine over false statistics

  • Countries deliberately cooking the books can be fined 0.2 percent of their GDP (Photo: Valentina Pop)

Spain became the first casualty of beefed up EU rules on statistics after the European Commission Thursday (7 April) recommended the country be fined €19 million for misreporting of deficit data by the region of Valencia.

"Sound fiscal policy is a fundamental precondition for economic growth and stability. We have learned this lesson the hard way in the last years," said EU commissioner Marianne Thyssen, in charge of statistical agency Eurostat.

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The EU investigation found that Valenican authorities had "systematically sent incorrect information to the national statistical authorities over many years."

Reports by local auditors and the regional health ministry "seem to have been ignored" said the commission.

But it found Valencia guilty of being "seriously negligent" rather than acting with intent.

The matter came to light in May 2012 when the Spanish government told Eurostat if would have to revise its budget deficit for 2011 upwards, largely due to Valencia's incomplete data.

The €18.93 million fine has to be given the green light by member states to take effect.

The sum is 80 percent lower than it could have been, as the commission took into account the fact Spain co-operated fully and the faulty figures were due to "one entity acting alone".

Under rules that went into force in November 2011, the commission can launch an investigation if a member state or region is suspected of manipulating statistics. Countries caught deliberating cooking the books can be fined up to 0.2 percent of GDP.

The new powers were a direct result of the eurozone debt crisis, and specifically Greece, where misreporting of the country's statistics was known about for many years but not acted upon.

The Greek situation eventually meant that a deficit forecast of 4 percent for 2009 had to be revised to over 12 percent, sending markets into a tailspin and leading the country into the first of its bailout programmes.

Looking to the future, Thyssen said the commission is not currently investigating any other national statistical authorities. But she noted: "We will use our powers when we have to use them".

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