A Greek Statistician's Cautionary Tale

The continuing legal troubles of Andreas Georgiou, the former head of Elstat, Greece's official statistical agency, show how economic statistics, far from being a boring matter of interest only to geeks and wonks, can be an intensely political matter. Different interpretations of accounting rules can lead to sharply different political decisions, and these, in turn, can affect public trust in the official numbers in unpredictable ways.

Georgiou has been trouble with Greek prosecutors since 2011, a year after Elstat was formed following a long confrontation between the old Greek statistical agencies and Eurostat, which compiles statistics for the European Union. Eurostat had produced two damning reports on the quality of Greek statistics, in 2004 and early 2010. Both discussed the Greek government's persistent under-reporting of debt and deficit levels, which had to do both with the low quality of the underlying data and, according to Eurostat, with deliberate misreporting. Greek statisticians were reluctant to fully account for various indirect government obligations, such as guarantees on state companies' debt, and they tended to be overoptimistic when estimating tax collection levels. Greece was allowed to adopt the euro on the basis of inaccurate statistics.