The Greek data crises

• Author: Andersen, Benny
• Pages: 32-33

32 | D i s c u s s i o n P a p e r S e r i e s | J u n e 2 0 2 0

A Eurostat disclosure of misreported fiscal data shortly after the Pasok government took office

    G   I       

as severely underreported in the years from 2005 to 2008 and in the 2009-year forecast.

Revisions completed in November 2010 were particularly extreme for 2009, raising a 3.7%-of-

GDP deficit reported in the spring of 2009 in a series of steps to eventually reach a stunning

15.4% of GDP, with the debt revised upward to 126% of GDP from 100%.

The European Commission did not take these revisions lightly, with the Ecofin Council requesting

       G   A  J 

report delivered a harsh verdict, noting, ‘     

     G    E C a). The

report referred to weaknesses of method and political interference, with the quality of fiscal

statistics subject to political pressures and electoral cycles. It described inappropriate

governance, poor cooperation, diffuse personal and institutional responsibilities, ambiguous

staff empowerment, and a lack of written instructions and documentation. Following

consultations with the Greek authorities, the IMF concluded the data misreporting reflected

serious institutional shortcomings. Remedial action to prevent any more misreporting included

approving a law to grant the Statistical Office independence, something the IMF had been

recommending for years. Eurostat accepted Greek government statistics without reservations

from 2011 to 2015, but the IMF said later the independence of the Hellenic Statistical Authority

EL“TAT        .. raising doubts about the underlying

commitment of the country to truly independent statistics and pointing to risks o f re -

politiciz    IMF a).

The 2009 event marked the second severe fiscal data crisis in Greece within a few years, despite

sustained efforts by the IMF and Eurostat to raise the fiscal data quality to the level of other

Member States. Eurostat had discussed statistical budgetary issues for years with the Greek

authorities, far more frequently than with any other Member State, and numerous footnotes

appeared to state reservations about the quality of Greek budget data.

In 2004, Greece undertook exceptionally large revisions of its budgetary data, leading a Eurostat

report that year to conclude that data for Greek fiscal deficits and debts had been misreported

since 1997. Never over the years since 1995 had the deficit fallen below 4% of GDP, and from

1999, the government debt ratio had been on a rising trajectory. A May 2000 Convergence

Report estimated a 1.6%-of-GDP deficit for 1999, but this eventually rose to 5.8% of GDP

following Eurostat actions and a fiscal audit required by the incoming Spring 2004 Greek

government. It meant Greece never fulfilled the Maastricht criteria in this area (Table 3). By

January 2010, Eurostat had undertaken 10 Excessive Deficit Procedure visits to the country,

expressing five reservations about the data. This included a number of methodological visits that

           h respect to

         C ‘ EC N 

amended).