Charges fly over audit

The decision by Eurostat, the European Union’s statistics agency, to recommend that governments record military expenses upon the delivery of equipment and its integration into a country’s armed forces instead of doing so when the order is placed has raised a political firestorm, with the opposition Socialists vehemently denouncing the government and its decision to «audit» state finances and restate the budget deficits from 1997 to 2003. The restatement of the deficits resulted in Greece exceeding the acceptable limit – 3 percent of the country’s GDP – each year over the seven-year period, meaning that Greece had managed to join the eurozone in 2001 by providing false data. Eurostat itself, when it accepted the new conservative government’s methodology of recording military expenses at the time of order placement – an approach which Eurostat has now abandoned – had said that transferring military expenditure to the time of ordering accounted for between 25 percent and 90 percent of the difference in the budget deficits as recorded by the previous government and as restated by the new one. The Socialists, interpreting Eurostat’s endorsement of the accounting method they used as a vindication, have denounced their successors’ «deliberate attempt» to blacken their record and say that it had extremely negative repercussions for the country’s image. Opposition leader George Papandreou and other Socialist officials have accused the government of cynically using the audit as a way to avoid keeping their extravagant pre-election promises. Yesterday, government officials zeroed in on Papandreou, accusing him of abandoning his earlier, more moderate stance in order to adopt a populist tone and carry his party with him. Economy and Finance Minister Giorgos Alogoskoufis said Papandreou «remains devoted to the (previous government’s) policy of virtual reality and deception.» «The economy minister should be hiding,» replied former Socialist minister Vasso Papandreou.