strengthen the status of the data compilers, by giving more independence and
accountability to the national statistical institutes. In the latest two or three years, the
Commission has taken several steps in this direction, including all the suggestions by the
authors. Obviously, it is very early to say how fruitful such steps are.
But are political pressures and opportunistic behaviour the main cause of the lack of
reliability of fiscal data in the EU? Or are there other causes? If the lack of reliability of
government accounts was directly and decisively connected with political pressures, one
would expect the countries with less reliable data to be those that have had more
problems with the respect of the EU fiscal reference values, and vice versa. The three
countries that the authors use in their case studies (Greece, Italy and Portugal) would
confirm the conjecture. Yet, we could also expect similar problems with the French and
German figures. Now, if we consider data reported by Member States since 1994, France
and Germany have the most reliable deficit data in the EU.122 So the question is: what do
the French and German have that avoids them to resort to the same gimmickries of
Greece, Italy and Portugal. (Or, do they resort to other tricks?) If I now apply the model
proposed in the chapter, I am led to conclude that France and Germany bear larger costs
(Cx) for entering in data manipulations with the purpose of hiding their deficits. Why? Is
this because of institutional reasons? Are the French and German statistical institutes
more independent than in other Member States? It would be interesting to research on
what can be done to increase the reputation costs for producing unreliable data in Greece,
Italy and Portugal.
If we try identifying what are EU Member States with the less reliable accounts we get
some surprising results. Among the countries that have reported the less reliable data, we
find not only Greece, Portugal and Italy, but also Sweden, Luxembourg and Denmark.
Now, these are among the countries that have had less trouble in complying with the EU
fiscal framework. Of course, the data revisions in Sweden and Denmark did not catch the
public opinion, as the ones in Italy and Portugal, not to say Greece, but the magnitudes
are not dissimilar. My point here is that the opportunistic manipulation of data certainly
has an implication of the reliability of data, but there are other factors at play. It may be
the reputation of the data compilers, irrespective of their status of independence, or the
resources, competence or expertise available to each statistical institute, or even the more
or less complex institutional arrangements in each country, or because some countries
enter into more complex transactions than others. Or perhaps, the reliability difficulties
would simply reflect the fact that our accounting rules are excessively complex and
unreliability is somewhat inevitable, or very costly to avoid. We do not know. We would
also need more research on this.
The authors identify two fragilities of the deficit indicator: (i) the fact that it is measured
in an accrual basis and (ii) the fact that it is measured net of financial transactions. Do the
authors believe that these two fragilities are such that the deficit definition should be
changed? Would a cash deficit including some financial transactions be a better, and
more reliable, definition? My understanding is that the authors believe that the current
deficit definition is still preferable to any other, and they simply want to pinpoint the
areas that need to be closely scrutinised by Eurostat.
For an analysis of the reliability of government deficit and debt statistics in most EU countries, see
Gordo and Nogueira Martins (2007).
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