And Now Another Episode of “As the Sovereign Enron Turns”

In our last episode of this thrilling saga, we saw the EU had discovered the Greeks were cooking their official books. No bother, it’s not like anyone pays attention to unemployment, GDP, or inflation measures. After all, they’re just numbers.

And of course, everyone has been waiting with baited breath, wondering if the Europeans would approve Greece’s deficit reduction plan. On the surface, they did. From the press release:

The Commission shares the ambitious budget-deficit reduction targets that the Greek government has set itself as well as the fiscal measures and structural reforms announced in the stability programme. The Commission also welcomes the announcement by the Greek government, on Tuesday, of a set of additional fiscal measures (concerning the wage bill, excises on fuel and pension reform), to safeguard the budgetary targets set in the programme.

But then as you read on, you realize it’s not that simple. Because the release goes on further to discuss specific recommendations the European Commission made which they want to see Greece comply with. You have the highly prescriptive:

The Commission recommends to the Council that Greece adopts a comprehensive structural reform package aimed at increasing the effectiveness of the public administration, stepping up pension and healthcare reform, improving labour market functioning and t he effectiveness of the wage bargaining system, enhancing product market functioning and the business environment, and maintaining banking and financial sector stability . This recommendation is made under Article 121(4) of the Treaty, ‘ with a view to ending the inconsistency with the broad economic policy guidelines and the risk of jeopardising the proper functioning of the monetary union’. The recommendations are largely included in the stability programme but require clarification in some cases.

A word of advice: next time (Spain, Portugal, Italy, whoever else is on deck), if you want to a country to just scrap everything in their economy and rebuild it from the ground up, just come out and say it. It’s easy. Say something like “your economy is crap, you need to go ‘back to formula’ and rethink everything, so go on and get on with it.” There. Message received: loud and clear.

And then of course, here’s my favorite: you have to actually report factual numbers. I don’t know if they’ll be able to handle this:

Considering that Greece has failed in its duty to report reliable budgetary statistics, as seen again in October with a significant revision of data for 2008, the Commission is also initiating infringement proceedings, requesting the government to take all necessary steps to ensure that the systemic failures and weaknesses identified in the recent Commission report are corrected. Greece is asked to cooperate with the Commission so as to promptly agree on an Action Plan to tackle statistical, institutional and governance deficiencies, including the adoption, by 15 May, of legislation that makes compulsory to provide public reports on budgetary execution on a monthly basis, the obligation for social security funds and hospitals to publish accounts and enhanced control mechanisms and effective personal responsibility in the statistics and general accounting offices as well as receive the appropriate resident technical assistance for the compilation of reliable statistics.

That’s right, this is the gang that can’t report straight. There have been reports surface of faulty reporting, corrupt officials, you name it, it’s been put out there.

If you want to read the release in all of its glory – or lack thereof – it’s included below:

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Filed under finance, government, International, Way Forward

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