Context

According to the European regulations, all EU Member States have to compile government accounts, notably the government deficit and debt. The decision on the participation in the European Monetary Union would depend on the government accounts. In particular a deficit below 3% of GDP and debt below 60% of GDP, or if above, declining. World map showing location of Europe Europe is geologically and geographically a peninsula, forming the westernmost part of Eurasia. ... A budget deficit occurs when an entity (often a government) spends more money than it takes in. ... Debt is that which is owed. ... In economics, a monetary union is a situation where several countries have agreed to share a single currency among them. ...

Up until 1995, Greece recorded very high deficits, for some years above 10% of GDP. Then it miraculously melted down. In 2000, given a deficit below 3% of GDP, Greece was accepted as the 12th member of the European monetary union. 1995 was a common year starting on Sunday of the Gregorian calendar. ...

Doubts about quality of numbers, and first major revision

The quality of the Greek numbers were a source of suspicions among the European statistical community. However, nobody dared to publicly raise doubts about the quality of the numbers compiled by the National Statistical Service of Greece (NSSG). The National Statistical Service of Greece (NSSG) is a General Secretariat of the Greek Ministry of Economy and Finance with more than 1100 employees. ...

In March 2002, Eurostat refused to validate data transmitted by the Greek government. In reaction to this, the NSSG revised the debt level by several percentage points. In September 2002, Eurostat refused again to validate data. The debt was more revised upwards, while the government balance (the Greek government pretended they were recorded a surplus) became a deficit. 2002 : January - February - March - April - May - June - July - August - September - October - November - December A timeline of events in the news for March, 2002. ... The Statistical Office of the European Communities (Eurostat) is the statistical arm of the European Commission, producing data for the European Union and promoting harmonisation of statistical methods across the member states. ... 2002 : January - February - March - April - May - June - July - August - September - October - November - December A timeline of events in the news for September, 2002. ...

Most recent revision

In March 2004, Eurostat refused again to validate the Greek numbers. This was shortly before Greek elections and a new government (New Democracy) was inaugurated. 2004 : January - February - March - April - May - June - July - August - September - October - November - December Deaths • 08 Abu Abbas • 20 Queen Juliana • 28 Peter Ustinov • 30 Alistair Cooke More March 2004 deaths Ongoing events EU Enlargement Exploration of Mars: Rovers Haiti Rebellion Israeli-Palestinian conflict Occupation of Iraq Same-sex marriage in... For the Canadian political party that ran in the 1940 Canadian election see New Democracy (Canada) Party logo New Democracy or ND (Greek: Νέα Δημοκρατία, Nea Dhimokratia), founded in 1974, is one of the main center-right liberal political parties in Greece. ...

When the conservative party New Democracy won the March 7 elections in 2004, said it would start a an objective financial audit of the government accounts. George Papandreou, president of PASOK which was the main opposition at that time, and the other 2 smaller parties, initially agreed with the need for an audit. But it lasted a very short time during which neither outside auditing firms nor the central bank were asked to carry out such an audit. Instead, the government produced new estimates while investigating the years 1997 - 2003, and the resulting data was given to Eurostat, which then went on and published a report. For the Canadian political party that ran in the 1940 Canadian election see New Democracy (Canada) Party logo New Democracy or ND (Greek: Νέα Δημοκρατία, Nea Dhimokratia), founded in 1974, is one of the main center-right liberal political parties in Greece. ... Legislative elections were held in Greece on March 7, 2004. ... Basic definition A financial audit is the examination of financial records and reports of a company, in order to verify that the figures in the financial reports are relevant, accurate, and complete. ... George Papandreou could be George Papandreou, senior, Giorgos Papandreou (1888-1968) Three time Prime Minister of Geece (1944-1945; 1963; 1964-1965) George Andreas Papandreou, (1952- ), grandson of George Papandreou, senior, former Foreign Minister of Greece from 1999 till 2004. ... Party logo The Panhellenic Socialist Movement, better known as PASOK (Greek: Πανελλήνιο Σοσιαλιστικό Κίνημα, Panellinio Sosialistiko Kinima, ΠΑΣΟΚ), is a Greek social democratic political party. ... The Statistical Office of the European Communities (Eurostat) is the statistical arm of the European Commission, producing data for the European Union and promoting harmonisation of statistical methods across the member states. ...

It appeared that the Greek government accounts were falsified (Eurostat diplomatically avoids this word) since at least 1997. If the true figures were known, Greece would have never joined the European monetary union. Because of this falsification of accounts, the Greek government managed to save millions of euros for several years, since it benefitted from cheaper interest rates than it would have received otherwise.

A few commentators found it surprising that the Greek public prosecutor did not start an investigation into the crime of falsification of documents. This fact could suggest that Greece is not a state of law, and that some crimes can go unpunished.

Political dispute

New Democracy's government then accused Costas Simitis and PASOK, who was the prime minister and president of PASOK at that time, of having falsified Greece's macroeconomic statistics, on the basis of which the European institutions accepted Greece to join the Eurozone. All the opposition parties accused New Democracy's government on making a census that was not a real one. Moreover PASOK said that it never falsified any data, and that New Democracy's government just changed the way costs were put in years and some other logistic techniques, and that the way PASOK used to do it, was known to the Eurostat and Eurostat never opposed to it. Costas Simitis Constantinos Georgiou Simitis (born June 23, 1936), usually known as Costas Simitis, was Prime Minister of Greece and leader of the Panhellenic Socialist Movement (PASOK) from 1996 to 2004. ... The Eurozone (also called Euro-area or Euroland) is the subset of European Union member states which have adopted the Euro (€) currency, creating a currency union. ...

Costas Simitis wrote in an article in the Financial Times claiming that Greece's deficit revision damaged Europe. There Simitis states among other things 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. Some days later FT received a comment by the Director General of Eurostat. The Financial Times (FT) is an international business newspaper printed on distinctive salmon pink broadsheet paper. ...

As a result of that financial audit, Greece fell in the list of the loan creditability and now pays more taxes on the loans it has with other countries. EU Commission warned Greece about future problems if Greece, now with the new data, does not comply with the Eurozone requirements.