In news that will likely not surprise many, Greek newspaper Eleftherotypia reports that according to a just terminated member of the Greek Statistical Authority, Greece artificially misrepresented its 2009 15.4% deficit number to Eurostat in order to obtain aid from the EU and IMF. Per professor Zoe Georgantas “The deficit was artificially inflated in 2009 to show that the country had the largest deficit across Europe, including that of Ireland was 14% in order to justify all these severe measures against the country. And we presented in the Eurostat 15,4%.” While there appears to be a substantial political back story here, and we would be careful at taking these claims at face value, the last thing Europe needs is for its people to realize that they have been duped (and continue to be so), by the PIIGS countries, which as we pointed out before on several occasions, have figured out that the balance of power in capital extraction is entirely in their favor, and paradoxically see their position strengthened, the weaker they are, as the Eurozone has no alternatives but to keep ploughing ever more capital into these bankrupt nation. As such it would not be surprising if Italy’s official deficit has also, like in Greece, been substantially misrepresented in an adverse light recently,after being shown to be far better than reality for years, simply to have a stronger political case for demanding more EU and IMF funding.
And if you want some additional confirmation, there’s this: http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0475.2011.00542.x/abstract . Heavy reading, but basically, statistical analysis strongly suggests that the Greeks have been fudging all sorts of numbers. In the end Greece is just a preview of the main problem, though – Spain and Italy. By that I mean that the Euro countries *can* bail out Greece, or bail out the exposed banks, or some combination thereof; it might be wildly unpopular, but it’s at least possible. But the debts of Spain, Portugal and Italy are too large. The banks first made themselves too big to fail (forcing governments to save them), but now they’ve made themselves too big to bail out, which should be interesting.
Greece powned themselves.