This month the Greek supreme court has allowed public prosecutors to bring the former president of the Hellenic Statistical Authority (ELSTAT), Andreas Georgiou, to court to face charges of damaging the national interest for a second time - he was acquitted at the first attempt.
Given his former position, you would imagine that Georgiou's crime would involve falsifying national economic data in order to cover up tax shenanigans or to fool the markets into thinking that the Greek economy was healthier than it was.
You would be wrong. Georgiou's crime was that back in 2009, he strictly applied globally accepted international rules in reporting the Greek government's budget deficit, which had the effect of increasing it by just under 3% to a whopping 15% of GDP. In a classic confusion of cause and effect, the prosecutors are claiming that Georgiou's un-sugarcoated report caused financial and social damage.
What makes this charge ironic is that if we were to be serious about accounting rules, today we would actually get a rosier picture of the state of today's Greek public finances. Unlike in 2009, nearly all Greek government debt that is scheduled to be repaid in the near future has an ESM back-up facility to refinance on highly concessional terms - including very low interest rates, generous grace periods and contractually agreed-upon maturities of up to almost 50 years.
Calculating this debt in "present" (i.e. today's) value, as the leading governments and businesses that follow the international accounting rules IPSAS/IFRS do, suggest that the debt is actually 68% of GDP rather than 176%, the number you get if you considered the debt without taking into account maturities and duration. And that is without even deducting the significant value of government financial holdings to produce the net debt figure.
To understand the Greek government logic, you have to adopt a Byzantine rather than a Classical Greek mindset. The only plausible reason for not adopting international standards to reporting Greece's public debt is that a rosier picture weakens the case for debt forgiveness, because it suggests that the admittedly harsh medicine inflicted on the country might actually be working. Since the government was elected on the premise that Greece needs debt forgiveness rather than reform in order to survive, a rosy picture is the last thing it wants.
In nearly every domain - from healthcare to education and the environment - this government seems to avoid applying credible metrics to honestly assess the effectiveness of its policies and initiatives. Current draft legislation for measures to establish a digital organigram to fully map the Public Administration, for example, provides little transparency on accountability for staffing, scope, and responsibility of the myriad governmental agencies which seem to be starting, once more, to be staffed by new hires of government cronies.
Given the relative weakness of the media, this disregard for figures and evidence is deeply worrying. The fact that the government has restricted non-state TV to four channels through a dubious auction process, whose winners included a major state contractor and a shipping owner with shady connections, only compounds my concerns. This allows politicians to avoid confronting their true record.
Accurate, internationally comparable data is the key to reform. With such data, Greece can reform itself and fulfil its vast potential; without it, it will carry on muddling through from crisis to crisis, with a privileged few profiting from the economy's travails. For a country that belied the expectations of most economists and managed to all but eliminate a 15% deficit at huge cost for its citizens, a continuation of business as usual would be a tragedy. That's why the right figures are what creditors should be focusing on - and the time to push for them is now.
-- This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website. Reported by Huffington Post 2 hours ago.
Given his former position, you would imagine that Georgiou's crime would involve falsifying national economic data in order to cover up tax shenanigans or to fool the markets into thinking that the Greek economy was healthier than it was.
You would be wrong. Georgiou's crime was that back in 2009, he strictly applied globally accepted international rules in reporting the Greek government's budget deficit, which had the effect of increasing it by just under 3% to a whopping 15% of GDP. In a classic confusion of cause and effect, the prosecutors are claiming that Georgiou's un-sugarcoated report caused financial and social damage.
What makes this charge ironic is that if we were to be serious about accounting rules, today we would actually get a rosier picture of the state of today's Greek public finances. Unlike in 2009, nearly all Greek government debt that is scheduled to be repaid in the near future has an ESM back-up facility to refinance on highly concessional terms - including very low interest rates, generous grace periods and contractually agreed-upon maturities of up to almost 50 years.
Calculating this debt in "present" (i.e. today's) value, as the leading governments and businesses that follow the international accounting rules IPSAS/IFRS do, suggest that the debt is actually 68% of GDP rather than 176%, the number you get if you considered the debt without taking into account maturities and duration. And that is without even deducting the significant value of government financial holdings to produce the net debt figure.
To understand the Greek government logic, you have to adopt a Byzantine rather than a Classical Greek mindset. The only plausible reason for not adopting international standards to reporting Greece's public debt is that a rosier picture weakens the case for debt forgiveness, because it suggests that the admittedly harsh medicine inflicted on the country might actually be working. Since the government was elected on the premise that Greece needs debt forgiveness rather than reform in order to survive, a rosy picture is the last thing it wants.
In nearly every domain - from healthcare to education and the environment - this government seems to avoid applying credible metrics to honestly assess the effectiveness of its policies and initiatives. Current draft legislation for measures to establish a digital organigram to fully map the Public Administration, for example, provides little transparency on accountability for staffing, scope, and responsibility of the myriad governmental agencies which seem to be starting, once more, to be staffed by new hires of government cronies.
Given the relative weakness of the media, this disregard for figures and evidence is deeply worrying. The fact that the government has restricted non-state TV to four channels through a dubious auction process, whose winners included a major state contractor and a shipping owner with shady connections, only compounds my concerns. This allows politicians to avoid confronting their true record.
Accurate, internationally comparable data is the key to reform. With such data, Greece can reform itself and fulfil its vast potential; without it, it will carry on muddling through from crisis to crisis, with a privileged few profiting from the economy's travails. For a country that belied the expectations of most economists and managed to all but eliminate a 15% deficit at huge cost for its citizens, a continuation of business as usual would be a tragedy. That's why the right figures are what creditors should be focusing on - and the time to push for them is now.
-- This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website. Reported by Huffington Post 2 hours ago.