Greece’s Statistics Court Case, Again

I mentioned in the post last week about India fudging it’s GDP numbers, that in Greece they tried to prosecute the economist who produced GDP numbers they didn’t like.

Last week, Andreas Georgiou was acquitted by a Greek court for a third time. The first two acquittals were overturned because the government appealed the decision and won.

Georgiou was accused or reporting a government deficit that was larger than it actually was. Ten years ago, Greece was a new-ish member of the EU, and the EU requires member states to keep their deficits under a certain percentage of GDP. Greece didn’t, and was going to be denied certain benefits of memberships. Georgiou told the truth about the numbers, so the government wanted to put him in jail so it could collect the goodies.

In October 2009, the government of then-Prime Minister Costas Karamanlis, leader of the conservative New Democracy party, told the EU that the annual deficit would be 6% of gross domestic product—even though internal government data showed the deficit had already surpassed 10%.

When Mr. Karamanlis lost elections that month, the incoming government’s revelation that Athens had misled the EU, financial markets and Greek voters about public finances led to the unraveling of Greece’s bond market and marked the start of the eurozone debt crisis.

The full deficit for 2009 was over 15%, Mr. Georgiou reported a year later. The EU certified that he had applied European accounting rules correctly, fixing previous omissions.

But supporters of Mr. Karamanlis have long insisted that Mr. Georgiou inflated the deficit. Some of his accusers said he was an IMF agent, implanted in Athens to justify and perpetuate Greece’s strict international bailout by the IMF and eurozone.

Georgiou continues to live in exile in the U.S. Karamanlis still lives in Greece, and is still politically powerful within the party that is currently out of power.

Years ago, this case was the subject of a post on this blog entitled “Greece’s Numbers Aren’t Funny Enough”. That post, in turn, linked to this article:

Visiting European Union officials are said to be "speechless" over the dispute. But to an outside observer, the most disconcerting aspect of the case is that Georgiou couldn't name a top political figure who's publicly thrown his support behind him.

That article has more personal details about the case, and is heartbreaking (if macroeconomic statistics ever can be).