A case of statistical significance in Greece
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Hello and welcome to More or Less on the BBC World Service. I'm Ruth Alexander. Now, we're used to stories about statistics being misused on More or Less, but in Greece they've taken it to a whole new level. They're putting a man on trial for his statistical pronouncements with a maximum punishment of five years in prison. Wesley Stevenson's been following the story.
Yeah, hi Ruth. This story is extraordinary. It's the story of Andreas Georgiou, who was given the task of running the Greek statistics agency Elstat back in 2010.
And he's been accused of cooking the books, hasn't he?
Yes, and in doing so he's accused of inflating the Greek deficit to look higher than it really was. Now this is something he strongly denies, but he faces criminal charges for a breach of faith, something that's normally used against those who embezzle or misuse public funds. And if found guilty, Mr Georgiou, as you say, could face at least five years in jail.
So he comes in as the new head of the statistics agency, recalculates the deficit and ends up facing criminal charges. Wow. Why did he decide to recalculate those figures in the first place then?
Well, Greece was in real financial trouble at the time and the government wanted to prove to the international community that the numbers coming out of Greece were right. To get a picture of how bad things used to be, I spoke to economist Miranda Zaffer. She used to write reports on Greece for the investment bank Salomon Brothers and she says that everybody knew unofficially that the Greek deficit was much higher than the official figures said. And she said that one of their main tricks was to keep the interest payments of public entities off the books. She says the Greek railways was a particularly bad example of this.
The railroad company would go out and borrow from commercial banks with government guarantee because without the guarantee no creditor in their right minds would lend money to them. The railroad company used to have revenues that amounted to about 10% of the wage bill. These loans, they were off the books, and only when the loan would be called by the bank and the government would have to pay it off, then it would show up as general government debt, but without ever having...
shown up as a deficit. So there were public services and utilities like the Greek railways which were running huge losses while still able to borrow money with guarantees from the Greek government but these loans were always deemed off the books and so never added to the government deficit and what Andreas Georgiou did was put these debt payments back on the books.
That's right, he put the debts of 17 of these entities back on the books, and with a few other revisions, the deficit rose from 12% to 13% of GDP to 15.8%.
And why is he now facing criminal charges, though?
Well, I put this to Miranda Zaffer.
Beats me. If they should open an investigation in Greece, it should be as to why the deficit was understated in all previous years, not why it was revised upwards in 2009.
Now, some say the real reason that Andreas Georgiou is facing these charges actually comes down to politics, but not just the politics taking place in the Greek parliament, office politics.
So you mean, who's got the stapler, who's taking my scissors, that kind of thing, surely not?
No, it's a...
What happened when Andreas Georgiou became head of Greece’s statistics agency Elstat?
It's a little more serious than that. When Mr Georgiou was first parachuted in as the head of the Greek Statistics Authority, he faced resistance from the board over his revised figures. They wanted a say, they wanted a vote on it, and he said no, and this is when it got really messy. The board turned against Mr Georgiou. One board member has even been charged with hacking into his emails. What? One board member has been charged with email hacking. Wow. Yes, it's no wonder that Mr Georgiou once described Greek statistics as a combat sport. Eventually the board were fired and this resulted in strikes and protests and then ex-board member Professor Zoe Georgianta produced her own figures and this is when the accusations that Mr Georgiou artificially inflated the deficit first arose.
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