The European Commission has issued a “Report on Greek Government Deficit and Debt Statistics” expressing serious concerns about the quality of Greek fiscal statistics. The report was issued in response to the release by Greek monetary authorities on October 21, 2009, of revisions to statistics regarding government deficit and debt for 2005-2008, as well as a forecast of the same for 2009. The revisions increased the government deficit for 2008 from 5% of GDP to 7.7% of GDP and increased the planned deficit ratio for 2009 from 3.7% of GDP to 12.5% of GDP. These increases reflected a number of factors including the impact of the economic crisis, budgetary slippages in an election year and accounting decisions. It should be noted that these revised statistics have not yet been confirmed by Eurostat and may be subject to further revision pending the resolution of several unsettled issues that may affect the data upon which the statistics are based.
The report notes that these latest revisions are “an illustration of the lack of quality of the Greek fiscal statistics and show that the progress in the compilation of fiscal statistics in Greece, and the intense scrutiny of the Greek fiscal data by Eurostat since 2004, have not sufficed to bring the quality of Greek fiscal data to the level reached by other EU Member States.” The report goes on to find that the revisions were the result of two sets of problems – those related to statistical weaknesses and those related to failures of relevant Greek institutions, such as poor cooperation and a lack of clear division of responsibilities between institutions and officials, lack of guidance and lack of documentation.
The report calls on Greek authorities to “tackle resolutely not only the outstanding methodological issues” but to also establish “transparent and reliable working practices between the national services concerned, and to revise the institutional setting in order to guarantee the professional independence and full accountability” of relevant Greek institutions in an effort to bolster the reliability of Greek fiscal data.
The European Commission is expected to release another report proposing appropriate measures it recommends be taken by the Greek government to resolve these issues.