Top statistics official calls for independent national bodies as part of system similar to that of the ECB
ROME – Greece’s «concealment» of its real budget deficit shows eurozone statistics need a major shake-up if the soundness of data is to be assured, the OECD’s chief statistician told Reuters yesterday. «Greece’s case is particularly grave and demonstrates that the current situation doesn’t work,» said Enrico Giovannini, head of statistics at the Organization of Economic Cooperation and Development, itself a major producer of economic data. On Monday, Greece announced its budget deficit had broken the European Union’s 3 percent of GDP limit every year since 1999, raising doubts about the legitimacy of its entry into the euro area. The Greek authorities insist there was no deliberate wrongdoing but the European Commission said on Monday it would take legal action against Athens. Giovannini, 47, who was responsible for Italian economic statistics during Rome’s push to join the single currency in the late 1990s, said Greece had a strong case to answer. «We’re not talking about a particular maneuver or transaction. It seems that for years, the government deliberately concealed parts of its accounts,» Giovannini, who has been in his position since 2001, said in a telephone interview. The European Union’s statistics agency Eurostat, lacks the power or resources to prevent such cases, Giovannini said, and proposed a downgrading of Eurostat as part of an entirely new system of statistical supervision and control. The International Monetary Fund, the OECD and national statistics experts should join forces to form a new body with the power to look into government accounts, he said. «We need more detailed monitoring and a peer review, with the power to investigate what arrives at the national statistics office, not just how that office works,» he said. «The statisticians should have the power to audit.» Asked if this new body would substitute Eurostat, Giovannini said, «I wouldn’t say substitute, because the European Commission would probably still want a statistics institute for its own ends, but it would have a wider mandate than Eurostat.» Greater autonomy needed To increase the independence of national statistics offices, Giovannini suggested a system along the lines of eurozone central banks. Each statistics office would be granted the same guarantees of independence as are now accorded to central banks and could be overseen by «a European Statistics Institute» with a role similar to that of the European Central Bank in Frankfurt. «We need a more autonomous system,» he said, adding that it was regrettable that no such provisions were enshrined in the European Constitution signed last month in Rome. Another pressing issue for international statistics is the need for more harmonization of methodology in order to achieve more comparable data, Giovannini said, citing GDP, productivity and savings levels as particular problem areas. He pointed to a recent study in Britain showing that a decision in 1999 to change the way of calculating public sector output had lowered GDP by some 0.5 percentage points per year. «Other countries were moving to adopt the same changes but now they are pausing for thought,» he said. Giovannini said he was heartened by the success of a statistics conference organized by the OECD in Palermo, Sicily, which ended on Saturday and brought together top statisticians, bankers, politicians and economists from around the world. The conference laid the foundations for a limited number of commonly recognized «key indicators» covering economic, social, environmental and other policy areas, to put an end to what Giovannini called the present «bedlam» of unreliable data. «We have reached a point where people understand nothing amid all the noise of confusing and contradictory data, and they are losing faith in statistics. We have to do something about that,» Giovannini said.
