Recovering investment grade will require more than the primary surplus the Greek government hopes to achieve this year…
Recovering investment grade will require more than the primary surplus the Greek government hopes to achieve this year… the FT reports in an article…
In particular, “the Greek prime minister Kyriakos Mitsotakis he focuses his efforts on her recovery investment grade.
Greece has made huge progress since it was forced to go through a series of reforms under economic bailouts that began in 2010.
But recovering investment grade will require more than the primary surplus the Greek government hopes to achieve this year.
Greece must also show that it has strong institutions and an independent judiciary, and that means ending the baseless prosecution of former ELSTAT president Andreas Georgiou.
Georgiou, who came from the IMF, was hired by the then Greek government in 2010 to establish a truly independent statistical agency that would adhere to EU statistical standards.
According to Eurostat, the European statistical authority, the European statistical governance advisory committee and the International Statistical Institute, he did an excellent job.
But the next government “rewarded” him with felony charges, claiming he inflated Greece’s deficit and debt statistics in 2009 to push the country into seeking 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 into the failure to submit Greece’s revised 2009 fiscal statistics to a vote by the statistical office’s board before publication.
Georgiou, however, had adhered to the Code of Good Practice of the European Statistical Authorities, according to which “the head of the statistical authority” has sole responsibility for making decisions about statistical methods, standards and procedures.
This case is now before the European Court of Human Rights.
The second case is an investigation for “simple slander” carried out by the former director of national accounts at ELSTAT.
Georgiou issued a press release in 2014 defending his accounting.
The facts are not disputed.
These cases against Georgios have been supported directly or indirectly by successive Greek governments.
The New Democracy (ND) party was in power in 2009 and found it convenient to blame Georgiou for the state of public finances at the time.
The main opposition party, SYRIZA, followed the same path…
From a purely macroeconomic perspective, Greece has reason to hope that it will regain investment grade status this year.
The European Commission estimates that the growth of the Greek economy is among the highest in the Eurozone in 2022 and 2023.
But in addition to sustainable public finances and strong growth, Greece must demonstrate that it has strong and independent institutions.
This includes a judiciary free from political interference.
Judicial reform is a prerequisite for the Greek government to receive money from the EU Recovery Fund, with a focus on investment in buildings, digitalisation, skills training and speeding up judicial processes.
These reforms are necessary, but they do nothing to address a long history of political interference.
Greece must also have a strong, independent statistical agency.
The prosecution of Georgios will probably last several more years.
But there is more at stake than the plight of a single statistic.
Greece’s investment prospects and institutional strength, as well as the EU’s statistical credibility and governance structure, also hang by a thread.”