ce399 | research archive: (anti)fascism

Greece’s Debt Crisis: Fabricated_STATISTICAL FRAUD!

Posted in Uncategorized by ce399 on 05/10/2011

September 30, 2011 8:09 pm

History of statistics that failed to add up

Until recently Greek statistics were viewed with derision by the country’s eurozone partners.

Officials still joke about a large upward revision of gross domestic product in 2005, in which the then head of the statistical service claimed to have captured a large chunk of the black economy, “including the sizeable contribution of gambling and prostitution”.

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* Eurozone inflation hits three-year high
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According to revised budget data by Eurostat, the European Union statistical agency, Greece would have failed even to gain admission to the eurozone in 2001, as its deficit exceeded the upper limit of 3 per cent of gross domestic product.

The discovery of another deficit fudge triggered the country’s current crisis, when the newly elected Socialist government revealed a double-digit deficit in October 2009 – almost three times the previous forecast.

A year ago Athens set up an independent statistical agency, headed by Andreas Georgiou, a former International Monetary Fund official, as a condition of its €110bn bail-out by the European Union and IMF. Since then the quality of statistics produced by Elstat, the Hellenic Statistical Agency, has improved enough for Eurostat to drop its warnings about the reliability of Greek data on the public finances.

But Mr Georgiou has faced concerted opposition from Elstat’s union and its board of directors, who argued that they should jointly approve figures on the debt and the deficit before they were issued – in defiance of EU-mandated work practices.

“It seems that board members wanted to go back to the old days when officials at the finance ministry and the central bank got together to produce figures that served the national interest, regardless of accuracy,” says a former statistical service official.

The campaign to undermine Mr Georgiou extended to hacking attacks on his computer which, according to Greek electronic crime investigators, were allegedly made from a computer owned by Nikos Logothetis, the board’s deputy chairman. Mr Logothetis resigned from the board earlier this year after an Athens magistrate launched an official investigation. He denies any wrongdoing.

Zoe Georganta, another board member and statistics professor at the University of Macedonia, caused a public furore by claiming that the 15.4 per cent of GDP deficit figure for 2009 had been exaggerated.

It was this high figure that forced Greece to seek a bail-out by the EU and IMF.

Professor Georganta told the Financial Times on Friday: “I am still convinced the methodology was incorrect and the deficit number had no scientific foundation . . . it should have been revised downwards.”

Striking members of Elstat’s union blocked access to its building on Friday in support of Prof Georganta’s view. One union member said: “We face another round of salary cuts and maybe sackings because of what happened with Eurostat and the deficit figures.”

Mr Georgiou said: “These claims are baseless. Our methodology has been orthodox in every single detail.”

Eurostat said in a statement last week that Elstat’s figure for the 2009 deficit was “accepted without reservation”, and the agency had made progress in terms of reliability.

Under pressure from the European Commission, however, Evangelos Venizelos, finance minister, last week sacked the five remaining members of Elstat’s board, leaving Mr Georgiou with full responsibility for running the agency on his own.

But the strike has prevented Elstat from meeting its deadline for sending updated data on Greece’s output, public debt and budget deficit in 2010 to Eurostat, as well as details of economic performance in the first two quarters – figures that are urgently needed for EU and IMF experts to approve the 2012 budget before a first draft is presented to parliament on Monday.

http://www.ft.com/intl/cms/s/0/deeaea88-eb81-11e0-a576-00144feab49a.html#axzz1ZrF4EIRy

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