Ex-PM Simitis to Sarkozy: “Greece Has Not Cheated!” To Enter The Euro Zone

Former Greek Prime Minister Costas Simitis wrote an article to French newspaper Le Monde, directly answering Nicholas Sarkozy claims that  “Greece falsified statistical data in order to join the Euro Zone.” Simitis also indirectly gives an answer to Le Monde article claiming Goldman Sachs was the major Greek debt falsifier.

Costas Simitis: Greece Has Not Cheated!

“It is important to clarify the facts relating to the entry of Greece into the European Economic and Monetary Union (EMU), and thus enable a better understanding of the “Greek problem” at a critical time when relations of trust between Greece and the European Union are disrupted. In an interview broadcast on TF1, Nicolas Sarkozy, the French head of state, described as “false” statistical data provided by Greece on its accession to EMU. He even said that the admission of countries in the euro area was a “mistake” committed by the governments of the day, he was not a member.

Recall the facts: the membership criteria are established in the Maastricht Treaty and the related budget deficit (less than 3% of GDP), inflation, interest rates and the stabilization of exchange rates. Their achievement is certified by the European Commission and European Central Bank (ECB), while the admission decision is made by the finance ministers in the Council for Economic and Financial Affairs.

Greece joined the euro area based on its performance evaluated in 1999. In 2004, following elections, the new government led by the New Democracy party has made a retroactive change of the rules applied for the recording of military expenditure: the latter, instead of being recorded on the date of delivery equipment – as was the rule in European countries – have been transferred to the order date. So large amounts that would be part of the budgets after 2004 were recorded as expenses in the previous period, which increased deficits in this period.

It has repeatedly denounced the treachery motivated by considerations of petty politics. It is unfortunate that Mr Sarkozy took up this idea on his own, unless it questions the integrity of the Commission and the ECB. He also failed to notice a telling detail of bad faith marking this discussion: the fiscal deficit of France when it joined in 1997 (estimated at 3.3% of GDP) was higher than of Greece (3.1%). It is hoped that the obsession with statistics will eventually give way to a more mature, focused on the conditions necessary to ensure the coexistence of countries with uneven levels of development within the monetary union. It seems to be the only way to ensure the continuation of the European project.”