The case of Georgiou: When the Greek justice system is cast aside

Last June, under threat that a payment of more than 8 billion euros would be withheld, the SYRIZA-ANEL government and Finance Minister Euclid Tsakalotos were called upon to legislate for both the payment of legal fees incurred by the former Head of the Hellenic Statistical Authority (ELSTAT) Andreas Georgiou and the exculpation of those convicted in the 28 public-properties scandal. After (further) public intervention by the European Commission, the second demand was met. The first is still in the pipeline, as the former ELSTAT chief’s case with the Greek courts remains open.
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by Minas Konstantinou

In recent days Greece has once again garnered the attention of high-ranking technocrats and mass media, but for reasons far different than the prospect of a Grexit or the country’s re-entry into the bond markets. The case of Andrew Georgiou and the Hellenic Statistical Authority grows more and more significant as the conversation expands to encompass the necessity of protecting the country’s judicial system. But what exactly is the “Georgiou case,” and why are Brussels and other centers of power trying so hard to see that it advances?

The deficit that brought a bailout

Before we review Andreas Georgiou’s record at the helm of ELSTAT, a short chronicle of the fluctuations in the Greek crisis’ most famous single statistic is necessary. At the beginning of 2009, the government deficit was pegged at 3.7% of GDP. In April of the same year the Commission assessed it at 5.1%. That July, the Eurogroup announced that the deficit would reach 10%. As the country approached October elections, the PASOK and New Democracy parties reckoned the number at 6-8% of GDP, only to have the head administrator of the Bank of Greece announce, five days after the elections, that it might climb to 12%. Finally, in April of 2010, a day before the George Papandreou’s notorious pronouncement of bankruptcy from the island of Kastellorizo, Eurostat announced that the 2009 deficit had reached 13.6% of the GDP. Two weeks later, the IMF put its foot down on Greece, and at the beginning of August Andreas Georgiou entered the equation when he took up the helm at ELSTAT.

A year after assuming his duties, Georgiou found himself the subject of criticism. Zoe Georganta, a University of Macedonia professor and then-member of the governing board of ELSTAT, charged that he had intentionally exaggerated the Greek debt in 2009 with the cooperation of Eurostat, the IMF, and ELSTAT. At the time, the newspaper Eleftherotypia quoted Georganta as saying that “The national deficit for 2009 was intentionally reported at 15.4% by Eurostat. It had to seem to exceed that of Ireland, which was 14%, for such insufferable measures to be taken against Greece.”

At this point, we should highlight two documents that give still greater weight to the schemes for which Georgiou has been prosecuted. The first is an email that he sent to IMF boss Poul Thomsen informing Thomsen of an immediate need to modify the founding legislation of the independent Greek statistical authority. A week later, Georgiou himself received a letter from the then-head of Eurostat, Walter Radermacher, who is said to have instructed him in the notorious government debt swaps of 1996-2004 under Costas Simitis. These two documents have been published in Greece and indicate the high level at which such manipulations of the Greek economy took place. 

Thus in January 2013, felony proceedings were initiated by the Athens District Court against the then-head of ELSTAT against Andrea Georgiou and two of his colleagues, the chief director of national accounts Konstantinos Molfetas and Eufstathia Xenakis, the head of general statistics. Later, in July of 2015, Georgiou faced another charge, for breach of duty, on the grounds that when he assumed leadership of the then-newly established ELSTAT he had not yet resigned from his position at the IMF as an expert in collapsing economies.

On August 1, Georgiou was sentenced to two years in prison with three years of parole for breach of duty, on the charge that he had failed properly to inform the administrative committee of ELSTAT about the transmission of data regarding the 2009 deficit.

During his indictment, the newspaper Bema noted that “According to an order of public prosecutor Grigoris Peponis, all three individuals must be indicted for false certification in connection with the aggravating provisions of law 1608/50. The prosecutor further seeks an investigation into any instigators who might have instructed the accused to modify the data that ELSTAT presented at the time by ‘inflating’ the deficit with an eye to gaining recourse from the IMF and to the other events that followed.” This, then, was the real matter at hand.

The most upright of friends and partners

Since then, the “Georgiou case” has often made the front page of newspapers, whose clear aims are to clear him of the accusations. It is worth noting that, for various reasons, Greece’s creditors have been applying more public and more aggressive pressure for his acquittal. Most recently, the international press has entered the playing field.

In the space of a month, beyond the severe tone the Eurogroup has taken in demanding that the Georgiou issue be “resolved,” Vice-President of the European Commission Valdis Dombrovskis has also insinuated a position in favor of acquittal, as has Pierre Moscovici, the European Union’s economic commissioner. So too have international press organizations, from Germany to the United States.

More specifically, the Frankfurter Allgemeine Zeitung has written of how “The prosecution’s aim is to intimidate.” The British Financial Times took a position in favor of Georgiou and against the Greek justice system with the headline “A legal farce that casts doubts on Greek reforms,” while the American Politico wrote that by convicting Georgiou, “Greece condemns itself.”

More generally, over the last two years alone, the Commission and Eurozone have made a number of intervention clearly in advocacy of Georgiou, and this past May Eurostat made an exceptionally revealing statement in a report by its advisory body: “Remarkably, three ELSTAT officials, who according to the Commission did their jobs correctly, are being prosecuted on the basis of European regulations, yet there has been no effort whatsoever to call to account those who were responsible for the false statistical data in the two periods of 2004 and 2009.”

Georgiou himself, in an August 2016 interview in the Financial Times, didn’t mince words when he connected the conservation of ELSTAT’s 2009 data and his potential acquittal of charges with the broader conversation about the sustainability of the Greek debt and its possible reduction. Of course, he didn’t hesitate to represent himself during his trial, during which he insisted that his prosecution would lead to reconsideration of the country’s financing needs. 

It should also be noted that, with the exception of George Papandreou’s government, Georgiou has continually found himself in the crosshairs of the Greek government, only when the government has been in opposition. What is more, representatives of the Greek judicial system have protested vocally against these kinds of stratagems and applications of international pressure. In 2016, the Association of Judges and Prosecutors denounced the interventions, cautioning against “multiple injuries to the standing of the Greek judicial system inflicted by foreign and national centers of power,” which “lead with mathematical precision to the systematic invalidation of the judicial system, with whatever that implies for the rule of law.”

Whom does Georgiou’s acquittal acquit? And from what?

To an independent observer—though preferably a non-staff member of the Commission, the Eurozone, the IMF or anyone in its sphere of influence—there seem to be two main lines of thought on the Georgiou case. First there is the position held by the “partners,” who maintain that Greece’s bankruptcy and loss of national sovereignty were natural developments, and that the conduct of a technocrat who acted in accordance with instructions was so impeccable as to not require even the slightest amount of oversight—whether of his own actions or of anyone else’s.

But the other view holds that the data and other strong indications for the period before Georgiou took up his duties constitute, if nothing else, sufficient grounds for the Department of Justice to proceed with a substantive investigation of the case. In any case, any argument that someone should not be investigated “because he is innocent” is, by definition, childish and unconvincing. 

Whatever the outcome, the case of the former ELSTAT chief has already irrevocably exposed all parties, both inside and outside of Greece: the current SYRIZA -ANEL government and the preceding ones who for years accepted the ultimate humiliation of public demands; the Justice Department that permits such flagrant intervention into the country’s internal affairs as a prerequisite for receiving payments towards loan financing, the European and American partners, who can no longer conceal the terms on which their game is being played internationally, on the backs of democracy and justice. And of course, there are the major Greek and foreign media, who are yet again proving blind to the bigger, anti-democratic picture.

The one group who loses here, the vast majority of the Greek people, would seem to think that not a day had passed. On their screens they continue to watch, just as they have done for decades, infuriating episodes of cover-ups and obfuscations of tawdry scandals. The difference this time, though, is that these scandals come with European and American stamps of approval. 


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