Greece fudged its budget numbers to enter the euro club, and its reputation as a source of accurate financial figures never really improved. As the country’s financial crisis has worsened, the joke about its suspect fiscal numbers comes with the punch line, “lies, damn lies … and Greek statistics.”
The country sought to improve its standing last year when it created a new and independent statistical service, the Hellenic Statistical Authority.
The respected economist chosen to head it, Andreas Georgiou, has excellent credentials: a doctorate in economics from the University of Michigan, more than two decades at the International Monetary Fund in Washington. He speaks five languages and has black belt in jiu-jitsu.
“I thought the credibility of the country and its statistics in particular was an extremely important issue. I thought I could contribute in bringing back this credibility in my own little way,” Georgiou said.
The Statistical Authority may look like any other office. It’s a quiet place where people in suits work at computers and go to meetings. But in the last three months, it’s become the stage for a Greek drama.
Georgiou, who initially won kudos in Europe for restoring confidence in Greek data, is now being investigated by Greek prosecutors following a claim that he made the deficit appear worse than it is.
History Of Suspicious Figures
Before his arrival, the Greek budget numbers were suspect because the statistical service was part of the Finance Ministry. And according to economist Yiannis Tsarmougelis, politicians at the ministry pressured the number crunchers.
“There was always the ability of the ministry to affect the deciding body of the statistical service,” he said. “And, actually in the past there was a kind of negotiation between them on what was the level of inflation and so on and so forth.”
To remedy that situation, the Socialist government created the statistical authority, made it independent, put Georgiou in charge and created a special advisory board.
But the board clashed with Georgiou. One member faces criminal charges for hacking into his email. And Georgiou says the advisory board acted inappropriately and demanded to vote on data.
“The responsibility for producing the figures lies with the technical staff, led by me, and I have the final responsibility as the chief statistician of the country,” he said. “And anyway, I think for most people, I think it would be a little bit absurd to have voting on specific numbers.”
After Georgiou’s clashes with the board over numbers, the government dismissed most of the members.
Claims That Deficit Was Inflated
One of them shot back. Economics professor Zoe Georganta claimed that the statistical service under Georgiou may have may have artificially inflated the 2009 deficit. She suspects it was a ruse to justify tough austerity measures on Greeks.
“I don’t say that we were [okay] with the statistics all the time. We were not okay,” she said. “But we have to find a way to correct it, not to make it worse. We have made everything worse now.”
She also suggested that Georgiou was a puppet of the Europeans and his old employer, the IMF.
Her accusations sparked an investigation by the prosecutor for economic crimes.
Georgiou and two others in the statistical authority are being investigated for something called “breach of faith against the state,” a crime that can carry a sentence of up to life in prison.
But Georgiou says this investigation is about something bigger.
“This is what’s being attacked: it is people doing their job and following the rules … the European rules,” he said.
Georgiou is set to give written testimony on the investigation on Monday. Meanwhile, the EU’s central statistical service, Eurostat, is praising him and his employees and says it does not see any indication that Greece’s 2009 budget deficit was artificially inflated.