1. John Verrinder (Eurostat)
Improving public finance statistics – the Eurostat experience in Greece
John Verrinder (Eurostat)

2. Use of government finance statistics in the EU
Past tradition of (diverse) cash-based accounts, with moves towards accruals accounts; but often cash budgets.
Need for a common benchmark for public deficits and debts for EU economic governance.
Use of government finance statistics as a “proxy”
Common basis of accounting and comprehensive (government)
Consistent with macroeconomic statistics (e.g. GDP)
Accruals basis
But heavily reliant on (good quality) public accounting source data...
Hence Eurostat involvement (implicitly: Eurostat sets EU public accounting standards through its statistical rules and decisions)

3. European GFS Founded in legislation in European System of Accounts
Based on worldwide System of National Accounts, consistent with IMF GFS
Need for continuous interpretation of general rules:
Eurostat Decisions
Eurostat Guidance
Advisory body of Member State experts
Quarterly data availability
Reconciliation between GFS deficit and working balance from Member State accounting or budgeting system

4. A problem in Greece…. Long history of "issues"…
2004 Eurostat report shows that Greece was actually over 3% deficit limit when it joined the Euro
Almost continuous reservations by Eurostat on Greek data; action plan from 2006 to address many areas of weakness, addressed technical details, repeated visits
In retrospect, could we have done better?
Yes, with more powers and more resources…

5. …which got bigger…
2009 change of government leads to major revisions in GFS
Both actual (2008) and forecast (2009) data
2009 deficit now 15.6% of GDP; was forecast at 3% in March 2009, first reported at 13.6% in March 2010
Other information comes to light (e.g. Goldman Sachs off-market swaps)
Eurostat report of January 2010

6. Findings from Greece Institutional Verification
National Statistical Institute lacked independence and status in Greece
Lack of safeguards on changes to source data
Culture of statistics as a "political football"
Verification
Not enough for Eurostat to speak to National Statistical Institute … need to consider complete picture of data sources and quality procedure
Continuous monitoring required (more resources)

7. Main impacts on Eurostat's GFS work
More powers
Eurostat receives "audit-like" powers
Large fines for misreporting statistics
Member State statisticians benefit from assured (legal) access to necessary information
Quality emphasis
Focus on quality processes for GFS data
Role of Courts of Audit
More resources in Eurostat
Now 55 staff, compared with 9 in 2004

8. Follow-up in Greece
Intensive Eurostat visits, both standard and "upstream"
Eventually "clean" figures published November 2010
Main changes on public corporations, swaps, payables…
Institutional issues
New statistical law ("ELSTAT" independence)
New President
Joint statistical action plan
Technical assistance
Are we fully there yet? No….
Institutional aspects not "solid"
Many complex statistical issues in new operations

9. What could the future hold?
Eurostat continues to "hold the line" on GFS
Greater upstream scrutiny means finding more (in the short term)
Continued inventiveness by government, looking for loopholes in the rules, and potential pressure on statisticians
Steps to promote accruals accounting among EU governments
If not IPSAS, then maybe "EPSAS" (European standards)?
Persuading governments that the benefits outweigh the costs…
EU (euro area) Member States getting closer together
More MS budget scrutiny (how to do it in a harmonised way?)
Integrated budgets at EU level…need common standards
Shared EU Treasury / Eurobonds / Central EU institutions
EU level grows from being a small addition on the sum of MSs; what relevance for national figures??