Greek Prosecutors Seek Inquiry Over Deficit Claims

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ATHENS -- Greek prosecutors called on Tuesday for a criminal inquiry into the actions of the head of Elstat, the country's statistical authority, and two of his subordinates, over claims that they manipulated budget figures to justify the country's appeal for an international financial bailout.

The agency head, Andreas Georgiou, a veteran of nearly two decades at the International Monetary Fund, first came under scrutiny in the fall of 2011, when a former Elstat employee, Zoe Georganta, claimed that Mr. Georgiou had inflated the agency's official figure for Greece's 2009 budget deficit, saying it amounted to more than 15 percent of the country's gross domestic product.

In an interview with The New York Times last year, the statistics chief said that some members of Elstat's board represented vested interests that did not want the full extent of Greece's dire finances to come to light. "We were faced with significant pressures through the board not to revise the deficit upwards on account of fully applying European Union rules, but to minimize it," he said.

Greece's governing coalition, headed by the conservative New Democracy party, has lately undertaken a campaign to stamp out lawlessness and corruption, in part to impress its European creditors that it is serious about dealing with the country's deep-seated problems. However, critics charge that it is doing so by attacking a series of straw men while ignoring criminality and tax evasion among the business, professional and political elites that have run the country for decades.

This month, for example, the police raided a squatter house in Athens that had been occupied by leftists and a few anarchists for more than 20 years, even though the violence that had plagued the city for years had subsided in recent months. The opposition said that, far from a crackdown on lawlessness, the raid incited a new wave of violence and was, at base, intended to distract attention from a scandal that threatens to disclose rampant tax evasion by the wealthy and well connected.

The Greek financial crisis erupted in 2009, when an incoming Socialist government announced that the budget deficit was 12.4 percent of gross domestic product, more than twice the previous estimate of the former government, also headed by New Democracy. To date, neither the Socialists nor New Democracy have prosecuted any officials responsible for the understatement of the deficit.

It was about a year ago that prosecutors first summoned Mr. Georgiou, following the claims by Ms. Georganta that Elstat inflated the deficit beyond the 12.4 percent figure. They further called upon Parliament to consider whether the former Socialist prime minister, George Papandreou, and the former finance minister, George Papaconstantinou, should be investigated for their roles in expanding the deficit beyond 12.4 percent. A parliamentary committee last year found no wrongdoing by the politicians, vaguely highlighting instead "a lack of institutional knowledge of the euro zone."

Since then Mr. Papaconstantinou, who appointed Mr. Georgiou as chief of the statistics service in June 2010, has been ensnarled in the tax evasion scandal, accused of removing names of family members from a list of more than 2,000 Greeks with Swiss bank accounts that may have been used to avoid taxes.

world

This article originally appeared in The New York Times.


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