EU warns Greece statistics row 'dangerous' for bailout

[August 24, 2016]  By Alastair Macdonald and Renee Maltezou

BRUSSELS/ATHENS (Reuters) - The European Union called on Greece on Wednesday to quash what Brussels said were false accusations the Greek statistics agency rigged data to help foreign creditors and warned that the row posed risks to Athens' current bailout programme.

The Greek government quickly replied that it was "surprised" at the call from the European Commission for it to take a stance on a judicial matter and insisted it respected the independence of the Elstat statistics office.

Despite insisting she would not interfere with national courts, Marianne Thyssen, who oversees the Commission's data agency Eurostat, told reporters that former Elstat chief Andreas Georgiou effectively had no case to answer after the Supreme Court this month reopened an investigation into whether the former IMF economist had manipulated public debt data.

Georgiou, who stepped down in 2015 after five years running Elstat through the height of the Greek and euro zone debt crisis, has denied suggestions by politicians, including from the current left-wing government, that he may have helped Athens' foreign creditors, including his former employer, by exaggerating Greece's public debt problems.

A year after Prime Minister Alexis Tsipras secured a new bailout for Greece from its euro zone partners, Thyssen said the government must "actively and publicly challenge the false impression that data were manipulated during 2010-2015 period and to protect Elstat and its staff from such unfounded claims".

Failure to do so would damage the already fragile credibility of the Greek state with international creditors. Asked whether it could also jeopardize future disbursements of bailout funds, she declined to speculate but said:

"It is necessary to get the record straight and avoid misinterpretation because this could be very dangerous."

LETTER

Thyssen, as social affairs commissioner, oversees Eurostat which collates national data and she said that Eurostat had fully verified the Greek figures provided during Georgiou's term -- a contrast, she noted, to those sent to Brussels before he took office in 2010, when angry euro zone partners say Greece concealed the depth of its public deficit.

"For the Commission and Eurostat it is absolutely clear that data on Greek Government debt during 2010-2015 have been fully reliable and accurately reported to Eurostat -- unlike the situation before this period," she said.

Greek government spokeswoman Olga Gerovasili said Athens was surprised by the Commission's comments.

A stock ticker shows stock options inside the Athens stock exchange building in Athens, Greece, September 21, 2015. REUTERS/Alkis Konstantinidis

"In its letter the Commission states its standard principle to not comment on cases pending in the justice system, a principle which is shared and followed by the Greek government," Gerovasili said in a statement.

"However, there is a contradiction between this principle and the urging for the Greek government to take a stance on whether statistical data in 2010 were valid or not."

With Valdis Dombrovskis, the Commission vice president for the euro, and Economics Commission Pierre Moscovici, Thyssen wrote to Greek Finance Minister Euclid Tsakalotos on Tuesday. A government spokesman said the minister had already replied.

Georgiou was charged in 2013 with inflating figures on the 2009 budget deficit. His case has seen fellow senior economists and statisticians from around the world rally behind him. Some are helping to pay for his defense costs.

The case had appeared to be languishing but a move at the Supreme Court earlier this month to reopen it has put Georgiou under renewed pressure and, in Brussels' view, raised questions about the independence of Elstat from external pressures.

A recipient of repeated bailouts from its fellow members of the euro zone, Greece's credibility with its European partners remains fragile. Germany and other powers are still angry at the way, as they see it, successive governments in Athens ran up unsustainable debts, masked by dubious fiscal data, triggering a crisis that nearly wrecked the entire euro project.

(Editing by Dominic Evans)

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