“We Have a New Kind of Occupation in Europe by the Germans” Zoe Georganta (Reuters 16/9/2011)

Greece said on Friday it would replace the board of its independent statistics service (ELSTAT) after two members resigned and another was quoted as alleging that 2009 deficit data had been artificially inflated.

It said ELSTAT chief Andreas Georgiou would keep his post.

The upward revision of Greece’s budget deficit in 2009 to 15.4 percent of gross domestic product exposed the scale of the country’s fiscal derailment and sped up the debt crisis which is still rocking the euro zone.

“The 2009 deficit was artificially inflated to show that the country had the biggest fiscal shortfall in all of Europe, even higher than Ireland’s which was 14 percent,” ELSTAT board member Zoe Georganta was quoted as saying by the Eleftherotypia newspaper.

Georganta said the inclusion of a number of utilities under the general government inflated the deficit. She said this had not been handled according to Eurostat guidelines and that the chairman rejected the board’s objections.

“We have a new kind of occupation in Europe by the Germans,” Georganta told Real FM radio, adding that German officials at Eurostat put pressure on the government to inflate the 2009 deficit to justify harsh austerity measures.

Greece in 2010 unveiled legislation to make its discredited statistics service fully independent after the European Union demanded that it puts an end to the release of flawed economic data.

Frequent revisions of national account data since the country joined the euro zone in 2001 had infuriated its partners in the bloc who demanded an overhaul of the service.

The overhaul took place under former finance minister George Papaconstantinou. It included regulations to stop political meddling by giving parliament, rather than the government, the task of appointing its chief.

Papaconstantinou was quick to dismiss the allegations on Friday, saying the deficit revision was fully in line with Eurostat’s methodological guidelines.

He said the revision of Greek fiscal data in 2010 was the result of close cooperation with Eurostat and the same methodology as the rest of Europe was applied.

“Unfortunately for all of us, Greece’s deficit in 2009 was 15.4 percent of GDP as was officially announced by Eurostat and ELSTAT,” Papaconstantinou said in a statement.

“Let’s understand the dire situation the country faced instead of fabricating cheap and easy conspiracy-type excuses for the absolute fiscal derailment we experienced,” Papaconstantinou added.

Finance Minister Evangelos Venizelos on Friday introduced an amendment to a draft bill on bank supervision which stipulates that ELSTAT’s current board will be replaced, with the exception of its chief.

Parliament has to approve the new board at ELSTAT.

Venizelos told lawmakers on Thursday that the resignations did not affect data collection and processing and put his support behind ELSTAT chief Andrea Georgiou.

“Unfortunately, at a level of interpersonal relations and functions, a problem has emerged,” Venizelos said without elaborating.

“The president of ELSTAT is considered by all our institutional partners, and mainly by Eurostat, a person of experience and someone who can guarantee that the sad chapter of ‘Greek statistics’ is closed,” Venizelos said.

ELSTAT President Andreas Georgiou said in a statement: “The compilation of these statistics was done in full compliance with the rules and standards of the European System of Accounts and European Union Regulations.” (Reporting by George Georgiopoulos; Editing by Karolina Tagaris/Ruth Pitchford)

http://www.reuters.com/article/2011/09/16/greece-statistics-idUSL5E7KG25O20110916