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Monday, May 24, 2010

'Yes we cheated, but you should have noticed'

Greek PM George Papandreou made quite an astonishing comment over the weekend regarding the charge that Greece had cooked the books in order to gain entry to the euro.

Papandreou insisted, in an interview with El Pais, that letting Greece into the euro was not a mistake, saying, “the Commission was provided with incorrect figures for six years. Indeed, part of the responsibility was on Greece, but the Eurozone also lacked the tools to notice that”.

You must have sympathy for Papandreou - he inherited an impossible situation from his predecessor. And no national leader is going to take accusations of fiddling figures or collective dishonesty lightly but in this case it might have been more sensible for Papandreou to bite his tongue. His reasoning is similar to a benefit fraudster saying ‘yes, I lied to the authorities to get money but it’s your fault because you didn’t discover it”. Neither are Papandreou’s comments likely to go down well in the member states picking up the €110bn bill for the Greek bailout.


OldStone50 said...

Hmmm... Not quite. It would be "similar to a benefit [fund manager] saying ‘yes, [my predecessors] lied to the authorities".

Although Papandreou can undoubtedly be criticized, he has at least made an effort to come clean. And his assertion that the "victims" should bear some responsibility is spot on. The EU knew that Greece was cooking the books and did nothing. That speaks to the weakness of government that is founded on catering to colloquial interests - a sin hardly unique to the EU!

Manos said...

Every Greek government in my lifetime has started its first term in office by taking stock of the public finances and massively reviewing the debt and deficit figures. There is nothing new or noble in the practice or the motivation of such disclosures. It's called a 'big bath' and is common practice for management in the corporate and sovereign worlds alike. The latest incarnation of the Greek Socialists simply got their timing desperately wrong and ended up accelerating the inevitable collapse of our public finances. For proof, consider that the figure the Socialists gave was 12.7%, when in fact subsequent revisions are putting the true figure at 15.1%

More details here: http://lolgreece.blogspot.com/2010/10/eurostat-ii-revenge-of-eurostat.html