Episode 10 - Get with the (first) programme
Episode 9 - Greek economy toiling under pandemic pressure
VIDEO - How could Greece put the EU recovery fund to best use?
Episode 8 - Athens: An ancient city grappling with modern problems
What does the EU recovery fund deal mean for Greece?
Spain's challenges and opportunities in the EU recovery deal
The whole truth and nothing but the truth
Anyone who believes that it is imperative for a country’s economic data to be grounded in reality rather than fantasy has understood that the case against the former head of the Hellenic Statistical Authority (ELSTAT), Andreas Georgiou, is a farce.
People who think that it is shameful for decision makers who let go of the country’s purse strings to hide behind a statistician that revealed the extent of the fiscal derailment know that Georgiou’s legal troubles are a travesty .
It is equally clear that those who invested, and continue to invest, in the hope that the ex-ELSTAT chief’s travails will serve as a useful distraction from their own failings are fooling nobody.
There was understandable uproar in local and international media outlets over Georgiou’s recent conviction for failing to notify ELSTAT’s board in November 2010 that he was releasing a revised 2009 budget deficit figure, which ultimately reached 15.4 percent.
Georgiou was handed a suspended two-year sentence for this procedural matter even though the European Statistics Code of Practice states that the heads of statistical agencies “have the sole responsibility for deciding on statistical methods, standards and procedures, and on the content and timing of statistical releases.” He still faces further legal action over the allegation that the 15.4 percent figure was doctored to justify a bailout for Greece. The latter charge has repeatedly been proven to be preposterous and based on numbers that do not add up.
The statistician’s conviction for a misdemeanour, the apparent lynch-mob atmosphere at his trial and the threat that he could face severe punishment if found guilty of the more serious charge appears to have generated strong momentum for pressure to be brought on Greece to resolve this matter and end Georgiou’s scapegoating.
Bringing this fiasco to a definitive conclusion would mean that those who contributed to the deficit soaring before 2009 could no longer cover the trail they left with hearsay and an elaborately nurtured myth. Also, those who helped cultivate this lie since 2010, some who served in government previously, others in office now, would be forced to stop taking the Greek people for a ride – on this particular issue, at least.
To some extent, the current government has admitted that when it was opposition and made claims about artificially inflated deficit data, it was spinning a tale.
“I would like to say in the clearest possible way that the Greek government has full trust in the data of the Greek Statistical Authority and [EU statistics agency] Eurostat,” Alternate Finance Minister Giorgos Houliarakis told Parliament last September. “If the thermometer shows you have a fever, it is not the thermometer’s fault, but other reasons,” said SYRIZA MEP Dimitris Papadimoulis in an interview with the Athens-Macedonia News Agency this week. He added that the responsibility for the 2009 deficit lay with the New Democracy government led by Kostas Karamanlis (2004-2009) and the previous PASOK administrations.
It would be reasonable to demand of the coalition that this position should be expressed publicly by a senior official, such as the prime minister or finance minister, and that a member of the government back this up in court, should Georgiou stand a further trial. Getting the government to express a legal view on this matter would allow the judicial process to be respected and avoid leaving dispassionate observers with the impression that the matter is being covered up. Those who shouted “Long Live Greece” and various other things at Georgiou’s last trial will presumably be convinced that the whole thing is a fix no matter what the outcome.
The institutions would also be justified in asking New Democracy to clarify its position on the matter. The conservative party and its current leadership cannot continue treading on eggshells for fear of causing internal unrest. New Democracy cannot pretend that it is blameless in causing the crisis that sent Greece tail spinning into seven years of misery, and that it played a central role on cultivating the impression that PASOK and George Papandreou intentionally betrayed the country after taking power in late 2009. To continue this charade would be as devious as the actions of the current coalition parties when they were in opposition.
Everyone in Greek political life who has contributed to the creation and perpetuation of the falsehoods related to the Georgiou case should be exposed and publicly embarrassed.
Withholding the tranche
There has been a suggestion that the institutions should achieve this by withholding the next bailout sub-tranche of 800 million euros. This would be a mistake, though.
Firstly, in political terms, this approach would only embarrass and discomfort the current government, while letting others who are also responsible for the Georgiou charade off the hook. The conspiracy claims began as early as 2010 and the ex-ELSTAT chief’s legal battle began in 2013, not in 2015 when SYRIZA and Independent Greeks (ANEL) came to power. If the purpose of the exercise is to hold everyone accountable, then key players from the 2004-2009 period cannot be allowed to carry on without any blame or stigma, as they do now with the help of parts of the political system and local media.
Also, given that the next sub-tranche is destined for the repayment of state arrears, withholding it will end up doing more damage than good. A Greek business owner desperately waiting for a VAT refund so he can keep his firm afloat does not deserve to suffer for a farce organised by politicians to save their hides or win votes. The Greek economy and people have already paid enough for the selfishness of their leaders and there would be nothing to gain from inflicting this kind of punishment.
Furthermore, a decision to withhold the tranche may force the government in Athens to ensure that Georgiou’s legal nightmare comes to an end, but it should not absolve anyone outside of the country of any responsibility. Focussing just on Georgiou’s unacceptable ordeal means that no questions are being asked about how the Karamanlis government seems to have gotten away with submitting unreliable fiscal data to European Union (EU) authorities and whether officials from the European Commission, led by centre-right Portuguese politician Jose Manuel Barroso, have some culpability in failing to blow the whistle.
Finally, there is a danger that a wider point relevant to the Georgiou case will be missed if Athens is put on the spot only over the Maryland-based official’s fate. Behind this apparent show trial lies a deeply problematic judicial system. While the institutions can flex their muscles and ensure that the statistician is not made a scapegoat, thousands of other Greeks will continue to suffer the effects of an overburdened and dysfunctional system. According to the EU justice scorecard, the average duration of court proceedings in Greece is more than 1,000 days, which is by far the longest in the Union.
The argument has been made that the Georgiou case casts a shadow on the reform process in Greece. In fact, Georgiou’s travails are just the tip of the iceberg, highlighting the failure to make any marked improvements to Greek justice over recent years.
Next summer, Greece is due to exit its eight-year programme. Athens and its creditors, who have closely shaped and overseen this long adjustment process, will want to argue that a changed country is emerging. The sorry state of the judicial system currently stands as one of the biggest blots in their copybook. Addressing one high-profile case may send a signal, it may be the right point at which to draw a line, but this alone will not suffice.
*You can follow Nick on Twitter: @NickMalkoutzis