The writer is an FT contributing editor and global chief economist at Kroll
Greek prime minister Kyriakos Mitsotakis is focused on returning his country to investment grade status. Greece has made enormous progress since it was forced into a series of financial bailouts beginning in 2010. But regaining investment grade will require more than the primary surplus the government hopes to achieve this year. Greece must also show it has strong institutions and an independent judiciary, and that means ending the unfounded persecution of Andreas Georgiou.
Georgiou was recruited from the IMF by a new Greek government in 2010 to establish a truly independent statistics agency adhering to EU statistical standards. According to Eurostat, the European statistics agency, the European Statistical Governance Advisory Board and the International Statistical Institute, he did a great job.
The government that followed rewarded him with felony charges, alleging he inflated Greece’s 2009 budget deficit and debt statistics to push the country into an international bailout. After several trials and appeals, Georgiou was finally acquitted of the main charges in 2019. But he continues to face two related cases.
The first is a criminal investigation for not submitting Greece’s revised 2009 fiscal statistics to a vote by the statistical agency’s board before releasing it. Georgiou instead adhered to the European Statistics Code of Practice, according to which “the head of the statistical authority . . . ha[s] the sole responsibility for deciding on statistical methods, standards and procedures.” This case now sits with the European Court of Human Rights.
The second case is an investigation for “simple slander” brought by the former director of national accounts at Elstat, the Greek statistical agency. Georgiou issued a press release in 2014 defending his accounting and distinguishing it from the previous statistics produced by Elstat. The facts are not in dispute. But in Greece one can be personally liable for saying something that is true but damages someone’s reputation. There was an open hearing on this case before the Greek Supreme Court last week, but a ruling won’t be made for several months.
These cases against Georgiou have been supported directly or indirectly by successive Greek governments. Mitsotakis’s New Democracy (ND) party was in power in 2009, and its politicians have found it convenient to lay blame on Georgiou for the state of the public finances at the time. The main opposition party, Syriza, has benefited from the divisions the ordeal has sown within ND and also between ND and Syriza’s other political opponent, Pasok.
From a purely macroeconomic perspective, Greece has reason to hope it will obtain investment grade status this year. The European Commission estimates the growth of the Greek economy is among the highest in the eurozone in 2022 and 2023. Last summer, the country exited all of its enhanced surveillance by EU creditors and repaid its debts to the IMF early.
But in addition to sustainable public finances and robust growth, Greece must also show it has strong and independent institutions. This includes a judiciary that is free from political interference. Judicial reform is part of the government’s pitch for money from the EU recovery fund, with a focus on investing in buildings, digitalisation, skills training and speeding up court proceedings. These reforms are all necessary, but do nothing to address a long history of political meddling.
Greece must also have a robust, independent statistics agency. Any successor to Georgiou might take note of his legal battles and think twice about standing up to domestic political pressures and implementing EU norms in statistical analysis and reporting. Good economic policy can only be made with good data.
There are severe knock-on effects for the EU as well. In November, the commission put forward a new proposal to revamp the EU’s fiscal rules before they are reimposed in 2024. This proposal is the starting point for a debate over the next few months. But there is no point in having fiscal rules, however well-designed, if member states do not enable their statisticians to measure effectively and independently the metrics on which they are based.
The prosecution and persecution of Georgiou will probably drag on for several more years. But there is more at stake than the plight of an individual statistician. Greece’s investment prospects and institutional strength, and the EU’s statistical credibility and governance structure, also hang in the balance.