When Accurate Statistics Are a Crime

Headlines about the U.S. Bureau of Labor Statistics remind us of a Greek statistical saga.

Let’s take a look.

Greek Statistics

In 2001, as a new member of the eurozone, Greece’s deficit could be no more than 3 percent of its GDP. However, in 2010, when Andreas Georgiou, a former IMF (International Monetary Fund) official, ran the Greek statistics office, he found little that was accurate. Instead of 3 percent the numbers were much higher.

But rather than thanking him for his accuracy, Greek authorities charged him with “complicity against the state, violation of duty, and slander.” The penalty could have been life in prison.

One reason for the Greek reaction was the EU response. Learning the accurate statistics, the EU demanded gargantuan government spending cuts that meant slashing the government payroll and cutting pensions. One woman who attended one of Georgiou’s trials said, “This man helped to destroy our country and ruin my family.” Like her, many others lost their jobs and retirement money.

You can see the difference between reported stats and the real ones:

The Georgiou case is about much more than one man.

Our Bottom Line: Accurate Statistics

Greece eventually needed a bailout. With a ballooning deficit, they could neither pay back what they were borrowing nor sustain the interest payments. And yet they needed to avoid a default that would injure the financial health of the banks and governments and individuals that owned their debt. Basing its assistance on the condition that all fiscal data was accurate, the EU saved Greece.

So yes, Greece finally knew its unemployment rate, its GDP growth rate, its pension obligations, its debt.

While its subsequent fiscal austerity was painful, only through accurate statistics could they identify and solve economic problems.

My sources and more:  The International Statistical Institute has a detailed description of the Georgiou case while this Voxeurop and FT were good complements. More recent, this article takes us to 2024. Although these articles indicate that many of the charges were dropped, it appears that parts of the case still linger. I could discover nothing that said all charges were dropped but should add that Dr. Georgiou has been a scholar at U.S. colleges including the University of Maryland and Amherst.

Please note that several of today’s sentences were from a past econlife post.