Greek Troubles Continue as Statisticians used as Scapegoats

An Economist hired to reform the Greek Statistics Authority in 2010 is at the eye of the storm as his own countrymen have launched a criminal investigation accusing him of aiding Germany to push Greece deeper into austerity. It is interesting to read how tight were the Ministry of Finance and the ELSTAT before the Greek collapse, which explains the disparity in the figures during that period.

Government officials say part of the problem with Greece’s statistical service was that, until recently, it was controlled by the finance ministry and at the mercy of ministers. In the past, some may have wanted to keep GDP low to collect more EU subsidies, while others wanted to boost GDP to keep the deficit ratio within EU rules, said officials.

Eurostat regularly used to give Greece’s numbers “reservations”, meaning it doubted their validity.

In 2004, then-finance minister George Alogoskoufis told Brussels that Greece had under-reported its budget deficit for years, including for 2001, the year it joined the euro zone.

Two years later, Greece stunned its European partners again by announcing that it was revising up its GDP by 25 percent after including money laundering and prostitution. Eurostat objected and approved only a 9 percent revision, but not before Greece had been ridiculed by international media.

“Greece managed to get by somehow, with reservations on its statistics, for some time,” said Georgiou, who has a Ph.D. in economics from the University of Michigan and held senior posts at the International Monetary Fund from 1989 to 2010. “It was an approach and a culture. But it led to a wiping out of the credibility of the statistics of the country.”

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza