ECONOMY

Simitis says rules were bent

Former PASOK Prime Minister Costas Simitis said yesterday European Union procedures involving audits of government accounts must be urgently reformed to guarantee objectivity. In an article in the Financial Times, Simitis, who steered Greece into the eurozone in 2001, said the initiative by the present center-right government to upwardly revise past budget deficit figures «bent previously accepted rules.» Greece has come under fire from the European Commission and faces disciplinary action for massive budget revisions which showed its deficit broke the EU 3 percent deficit limit every year since 1997. «The main lesson from the Greek case is that the Commission must design an auditing system that is the same for all EU countries and guarantees objectivity and impartiality while ruling out domestic political interference,» Simitis said. Otherwise, changing the rules of measurement after the fact «is a surefire way to destroy the stability and reliability of economic policy making and has immensely negative consequences for economic incentives and growth.» He said a system that allows national governments to recalculate at will the fiscal position they inherited from a previous administration and to impose this view on the rest of the EU was a «recipe for disaster. «It leads to widespread distrust and could prompt an endless round of revisions at a European level. It puts the statistics on which national and European policy is based at the mercy of the electoral cycle,» Simitis said. Simitis, prime minister from 1996 until March of this year, said conservatives had promised an objective audit of government accounts but failed to ask outside firms or the Bank of Greece to carry it out. (Reuters)