The transcript of Dialogos Radio’s interview with Zoe Georganta, professor of econometrics at the University of Macedonia in Greece, former board member of the Hellenic Statistical Authority (ELSTAT), and whistleblower. This interview aired on our broadcasts for the week of May 3-10, 2017. Find the podcast of this interview here.
MN: Joining us today on Dialogos Radio and the Dialogos Interview Series is Zoe Georganta. Professor Georganta is a faculty member at the University of Macedonia in Thessaloniki, Greece and is a former board member of the Hellenic Statistical Authority, known as ELSTAT. Professor Georganta first became widely known in Greece in 2011, when she publicly presented evidence showing that Greece’s deficit figures for 2009 were inflated, leading to Greece being brought under the supervision of the so-called “troika” [the IMF, the European Commission and the European Central Bank]. She will speak to us today about this issue and where the judicial cases which stemmed from it stand today, and about the potential continued misrepresentation of Greece’s economic figures by ELSTAT today. Professor Georganta, thank you for taking the time to join us today on our program.
ZG: Thank you, Mr. Nevradakis, for inviting me here for this interview.
MN: To get us started, share with us an overview of the information that you revealed against the Hellenic Statistical Authority regarding how the Greek deficit figures for 2009 were falsified and inflated.
ZG: As an econometrician and economic statistician appointed in August 2010 by the Greek parliament to be a member of the seven-member Hellenic Statistical Authority, I had the responsibility by law to express my scientific opinion, first within the meetings of ELSTAT in which all seven members, the president (or chairman) included, were supposed to discuss the statistical issues of the agenda and take a decision by the majority rule.
What actually happened from the first meeting of ELSTAT on the 3rd of August 2010 was very strange and seemed extremely peculiar to all six of us, since the president, Andreas Georgiou, supposedly an ex-vice president of the Statistics Department of the IMF—this was declared as his position in the IMF—insisted that he had to be the only person who could speak and decide, while the remaining six of us had to agree and sign his proposals without questions, because, according to him, we had the role of a rubber stamp. He said that openly to us. He also insisted that we should not keep minutes of the meetings, and when we all threatened to resign and publicize the issue, he agreed to keep minutes but he added that the minutes would report only his opinion and nobody else’s. So as you can imagine, there were minutes [of these meetings] but they were not signed by any of us.
ELSTAT, as a seven-member board, had only four meetings because the president [maintained] extremely strange attitudes. As the main issue was the measurement of the final estimate of the public, or general government debt and deficit for 2009, Mr. Georgiou kept presenting to us ad hoc numbers and he refused to answer our questions about how he came to those numbers.
Consequently, all six of us insisted then that the director of the national accounts division of ELSTAT, Nick Stroblos, comes to our meeting and explain to us those numbers. Mr. Stroblos’ comments were a catapult. He said that those numbers were wrong and they were fixed by violating Eurostat regulations and methodology, which are described in the ESA manual. ESA [refers to the] European System of Accounts, and this is legally constituted under European Commission regulation 2223/1996.
By investigating the issue, we found out that Mr. Stroblos was right. I must report here the fact that Mr. Stroblos was sacked from his position the very next day, after he expressed his reservations about the 2009 debt and deficit numbers which were fixed by Mr. Georgiou and by the general director of Eurostat, as we found out later.
After he sacked Mr. Stroblos, Mr. Georgiou went on to neutralize all six members of the ELSTAT board, with the help of the IMF representative in the troika Poul Thomsen, who, according to evidence, asked ECOFIN, the group of the finance ministers of the EU, to impose on the Greek government to change the statistical law so that ELSTAT would [fall under] Mr. Georgiou’s rule without a board of directors. This was finally done in 2011 and all six of us were sacked without explanation, just [as a result of] a clause within a law of economic austerity measures.
As you said, I was the first one to report in the press evidence of untruly augmenting the debt and deficit of 2009. Not mere allegations, but by indicating the exact violation of the Eurostat regulations and by referring to particular sections of the European methodology which were violated. I did that for the first time in October 2010. Then, I tried to inform the parliament and the government, but as they said to me, they had to obey orders by the IMF and the European Commission, who seemed to be covering for Georgiou. Apparently, as we found out later, [this was] in order to justify their unnecessary loans to Greece according to the memorandums of understanding that they had signed with the Greek government, and also to justify the second memorandum of understanding, after the augmentation of the deficit figure to 15.6 percent of GDP.
My criticisms were subsequently supported by the Vice-President of the ELSTAT board, Nikos Logothetis, [plus] another member of the board. The whole issue as it became public, was ex officio investigated by the economic prosecutors, who after one year of [investigating] came to the decision of pressing charges against Mr. Georgiou for two crimes. [The first charge] regards breach of duty for three instances: first, by lying to the Greek state that he had resigned from the IMF, while the truth was that he continued being an IMF employee. Second, not inviting meetings of the Board according to law, and third, transmitting falsified debt and deficit data to Eurostat without even discussing it with the board as he should have done according to law. The second [charge refers to] the felony of forging the data on the 2009 public debt and deficit.
The economic prosecutors decided that Mr. Georgiou committed all his criminal actions intentionally for personal benefit and for the benefit of others. Mr. Georgiou is [facing] these accusations today, and on the 29th of May, we have a court case in the second degree regarding his breach of duty. We hope that the truth will show, because these are simple and exact accusations. He lied to the Greek State in order to gain the post of ELSTAT president, and second, he stopped [convening] board meetings because all six members of the board were “bothering” him, as he stated in his letter to the Greek Parliament, and because he transmitted the augmented [debt and deficit] data which actually was dictated to him, as we found later, in correspondence between him and Eurostat’s general director Walter Radermacher. He [did this] without even discussing this data with the board, even though he had an obligation, under the law, to have a vote on that data, a majority vote. So, he transmitted [this data] illegally. These three instances of his breach of duty will be tried in court on May 29.
MN: Who is Andreas Georgiou, and what was his background prior to becoming the president of the Hellenic Statistical Authority?
ZG: After his strange behavior, I started [investigating his background] and I found out that his post at the IMF was not vice chairman of the statistics department, as he declared and as the then-minister of finance declared, but he was a simple employee of the IMF in the financial institutions division. His duty was to supervise the implementation of the IMF terms by underdeveloped countries receiving IMF financial assistance.
I also found out he was very rarely in Washington, [spending most of his time] in Africa. I know people, real statisticians at the IMF, and I contacted them as part of my job as an applied econometrician, and I also found out that he is not a statistician and his only publication is a book about martial arts! He has no scientific publications, only a discussion paper [co-authored] by another three people, and he is not the first name, at first. So far, he has no scientific publication in any field, and in particular in the fields of economics, finance, and statistics. Obviously he was imposed on Greece because the IMF and the European Commission knew, in my opinion, that he could be their man, I mean a puppet of his bosses. This is his character, as far as I understood him from his “collaboration” with us.
By my opinion and not only my own opinion, he was the most unsuitable person for the Greek case. He did not even write in Greek, and he had not been in Greece for 25 years after completing high school at the American Community Schools, not even for holidays. Now, at the age of 53 or 54, as I read in a recent article in The Wall Street Journal, he escaped from Greece when he [faced prosecution] to his Maryland mansion. And now, at his early age, he is an IMF pensioner while everyone in Greece and in Europe [receives their] pension at the age of 67 and not before that.
I want to say at this point that the IMF calculated wrong multipliers for Greece, [but this does not come as a surprise] because the statistics were based on incorrect data. It was not only the debt and deficit data were wrong, but also the data on expenditures and production that Mr. Georgiou manufactured, together with Eurostat. The result was unnecessary loans to Greece, and the deep recession we are experiencing for seven years now. You know, correct economic policies are based on correct data, and this was not the case for Greece.
Was the selection of this particular man an IMF mistake? All Greeks are wondering about that. Or, it was a plan to save the French and German Banks by loading debt upon debt on the Greek people. It is a real Ponzi scheme, what has been done on Greece, and this is a shame on the part of the IMF, the European Commission and the ECB. After so many loans, the Greek debt has tripled between 2009 and 2016. Is this justice [that is being] shown by our supposed partners, with whom we have fought together in world wars?
MN: If you can, Professor Georganta, share with us some additional details about the forthcoming court case against Mr. Georgiou, for which from what I understand you and fellow whistleblower Nick Logothetis from ELSTAT will appear as witnesses.
ZG: After so many unacceptable interventions with letters threatening to the Greek government from the European Commission, under the guise of the International Statistical Institute or the administrative personnel of the American Statistical Association, asking the Greek government to intervene in the Greek court system and to stop the court cases against Georgiou, there were three until now proposals by three individual judicial representatives who asked for Georgiou’s exoneration. All three were turned down by the Court Committees. He was not exonerated, as some foreign and Greek newspapers wrote. Those “exonerations” were just proposals by three judicial representatives, but they were turned down by the official court committees. So, now, we have the 29th of May court case against him for breach of duty. We are also expecting the actionable date for the felony [charges]. I would like to mention that Georgiou has been sentenced twice to one year imprisonment for libel against the ex-director of the national accounts division of ELSTAT, Nikos Stroblos, who was [fired] when he simply expressed his scientific opinion and reservations about the numbers, which were coming as if they were falling down from the sky, without any explanation.
It is not only me and Logothetis as witnesses against him. We are three out of the six members of the ELSTAT board who were brave enough to be witnesses. The other three members include two representatives of the ex-minister of finance [Giorgos Papakonstantinou] because he committed other crimes, fraud, against Greece, and the other was a representative of the Bank of Greece [and then-governor] George Provopoulos. Those people were afraid to come out, although within the meetings, we were all together against Georgiou, asking questions against those ad hoc numbers that he was bringing to us. Also, there are also other witnesses, there are other officials from ELSTAT and other statisticians. Regarding the breach of duty, all six members of the board have come out against [Georgiou] as witnesses, not only in court but in the Greek parliament.
I would like to say at this point that the European Commission keeps accusing Greece’s judicial system of intervening in the financial data of Greece. This is ridiculous and outrageous. It is clear that Georgiou broke the law and he has to be brought to court. He broke the law, it is very simple, and all the rest is to cover up the IMF’s and Eurostat’s responsibility for Greece’s deep recession, because of the unnecessary laws that they gave to Greece due to the wrong and untruly augmented numbers for Greece.
MN: Georgiou is no longer the president of the Hellenic Statistical Authority, having been replaced by Athanasios Thanopoulos. However, in your estimation, is the Hellenic Statistical Authority today continuing the same practices as before, through the falsification or alteration of Greece’s economic figures?
ZG. Tell me which statistical authority or statistical office in Europe, or [in the rest of the world] is under one person’s rule, as it has been imposed on Greece. Thanopoulos was actually appointed not by the Greek parliament but by the European Commission, and they imposed upon the Greek parliament to sign off on their decision to appoint Thanopoulos as the head of ELSTAT, without a board [of directors]. So ELSTAT today is under one person’s rule. How unbiased and how independent can the numbers be? That’s why now there are all these arguments between the IMF and the Europeans—not between the IMF and Greece or the Europeans and Greece—because Greece has no say. Eurostat manufacturers the data about the debt, and they claim that the debt is viable. But the debt is not viable.
Thanopoulos, in my opinion, has shown…[that] he has to obey the orders of Eurostat and the European Commission regarding the numbers, and especially the numbers regarding the debt and deficit of Greece. And of course, he has to support the deep depression policies for Greece. Are these policies [implemented] due to the incompetence of the Europeans and Thanopoulos? No. Our German pseudo-partners have said it openly, that Greek people are undisciplined and must be broken. Because of this, I think that the Eurozone is going to be doomed.
Greece’s economic history has been forged, first by Georgiou, and Thanopoulos continues in the same way, because they have changed the data. Since 1995, the data has been changed in a completely ad hoc manner. I have all the old data, and they wanted to show a smooth increase of the indebtedness of Greece, which is wrong. I have evidence, because I have worked for 42 years as an applied statistician, as an economic researcher, as a professor at the University of Macedonia, and as a visiting professor at Harvard’s National Bureau of Economic Research.
I have not managed yet because of my court cases, but very soon my bombshell book will be out in English. However, Thanopoulos’ behavior, I must admit, is not as absurd or stupid or nonsensical as Georgiou’s behavior was towards everybody, even towards the MPs of the parliament, the prime minister, and the ministers. So, Thanopoulos seems smarter but more secretly cunning, so that he can survive better than Georgiou.
MN: The current SYRIZA-Independent Greeks coalition government is claiming to have achieved a primary budget surplus, initially 3.9 percent and now 4.2 percent, well above the targets Greece’s lenders had initially set for 2016. Does this surplus exist in reality, however, or is it a product of creative accounting?
ZG: This is a very good question. It is for sure creative accounting. It’s not the people, the statisticians of ELSTAT who measure the numbers, according to the European methodology. But, Thanopoulos employs a lot of Eurostat experts, some Eurostat pensioners and European Commission pensioners who come to Greece, to ELSTAT, to manufacture the data, distant from the statisticians of ELSTAT. And of course, when there is sunshine, they go to the nearby island of Aegina, where they have good fresh fish and enjoy themselves with their wives. But they do their job and they are paid very generously. Well, questioning them, Eurostat says that it pays them, but that Greece provides a portion of Eurostat revenues.
Those surpluses are not healthy, if they exist. How can a country whose GDP has shrunk by 28 percent have primary surpluses? If it does, of course those surpluses are not healthy. They do not come from growth, but from squeezing the public expenditures for health, education, from stealing the revenues of the research organizations of Greece, changing them into public servants and public corporations, so that [the state takes] their revenue that they make out of research collaborating with foreign institutions. Also, those surpluses come, of course, from taxes that are choking any private entrepreneurial initiatives of Greeks, and of course by giving nothing for growth. The Greek debt has come to a point that it cannot be served any more, because as I said, the troika, or “institutions,” load Greece with debt in order to pay previous debt. Isn’t it crazy? All of this is creative accounting, unfortunately.
MN: In 2015, you presented evidence to the Greek Parliamentary Debt Audit Commission, which had been convened at that time. What did the evidence that you presented contain, and what was the outcome of this commission’s proceedings?
ZG: The Greek parliament has in its vault actual correspondences between the then-European commissioner of economic affairs, the general director of Eurostat, the IMF representative Poul Thomsen, and Georgiou, as well as the then-minister of finance of Greece, showing the involvement of the European Commission and Eurostat in untruly augmenting the Greek debt and deficit for 2009. This correspondence exists because Logothetis pressed charges against Georgiou for wrongly accusing [Logothetis] of “hacking” [Georgiou’s] personal e-mail. I want to say here that all charges against Logothetis have been dropped, although the Wall Street Journal had a recent article by Marcus Walker which completely distorts the facts, showing his outrageous bias in favor of Georgiou. It is a pity but it has happened. I am saying that to be clear, because Logothetis was not hacking anybody. His [proficiency with] computers is not at that level. How could he break passwords and all this that Georgiou accused him of?
Regarding the parliamentary debt audit commission, its work was interrupted because the prime minister [Alexis Tsipras] sacked Zoe Konstantopoulou as president of the parliament and also as member of the governing party [SYRIZA]. However, although my name is not reported in the final report, I gave data to that committee in parliament, but not all of it was publicized. Still, the outcome is that a sizable portion of the Greek debt is illegal and odious. I want to say at this point that the restructuring of the Greek debt that is under discussion now is completely nonsensical because it means a time extension of its repayment schedule, which is so unfair for the future generations of Greece. Now, it is in the next 50 years that the Greek debt is to be repaid, but they want to extend it to 80 or 100 years. Actually, [the institutions] have set a number, 99 years.
The Supreme Court of Greece came to the conclusion, in August 2016, that 210 billion euros is the measured damage done to Greece by the untrue augmentation of the public deficit of 2009. This damage to the Greek state has to be paid back to Greece, because the European Commission and Eurostat are among the partners in Georgiou’s crimes, with evidence which has been kept in parliament and in the Greek justice system.
MN: Indeed, at the same time that this parliamentary debt audit commission was convening, a number of Greek government ministers of that time, including then-finance minister Yanis Varoufakis and even prime minister Alexis Tsipras, were making public statements claiming that Greece’s debt would be repaid in perpetuity…
ZG: Yes, you’re right. Well, the Greek government, we all know, is with a gun to their head. I mean, [the institutions say] sign that you will pay all debt, otherwise we destroy you in the next minute, by completely switching off the taps of your banks. Of course, I think that a patriotic government would have publicized such threats without being afraid, but unfortunately our governments have not done so. I believe that [the institutions] are aware of fraud committed by [members of the Greek government], and they tell them, if you go on to publicize the threats, we are going to reveal to the Greek people your actual fraudulent behavior, the bribes you receive from German companies like Siemens, which has come out actually, and then a lot of other organizations in Europe. The Greek government has purchased, for example, submarines, spending a huge amount of money for submarines that go down to the bottom of the sea and never come back up. The Greek people have paid all this money, in addition to huge bribes on the side for particular [government] ministers, for “well-working” submarines and a lot of other weapons actually, planes which fall down and all these kinds of things. All of these European governing [authorities] know this fraud done by Greek politicians, so they actually tell them, “go on, publicize our threats, we’ll reveal everything you’ve done so that you will not be re-elected by the stupid Greek people.”
MN: Could you share with us a few words about the role of foreign banks and financial firms in the development and outbreak of the Greek economic crisis?
ZG: There is evidence that especially the German and French banks were bankrupt in 2008, because they had a lot American toxic debt. Also, they owned a sizable quantity of Greek state bonds. The Greek case of untruly augmenting the Greek deficits [was] in order to load us with unnecessary loans which go back to their banks, so that Greece buys back [its] bonds, so that the German and French banks can refinance their debts. This was a very appetizing idea [for the banks]. This has been actually said by people like [Paul] Krugman and a lot of other researchers and scientists, American and European.
MN: Before we wrap up this interview, Professor Georganta, and if I may… we have seen that the allegations that whistleblowers like yourself have made have been largely ignored by the Greek and foreign media. A government is in power which prior to being elected had promised to tear up the austerity agreements and to abolish them with one law and one article, which had also promised to halt the privatizations of Greece’s public assets and utilities, and which is now implementing the exact opposite policies from what it had promised. The “no” in the Greek referendum of July 2015 was very quickly turned into a “yes” by this same government. The European Union and Greece’s so-called “partners” and lenders have not shown even the slightest amount of flexibility with regard to Greece’s debt or other financial matters. And my personal impression is that the Greek people are resigned to their fates, allowing all of this to continue taking place in their country. In your estimation, what should be done and what can be done, in order for Greece to turn the page and change direction?
ZG: This is a very difficult question. Greece has through the centuries been under foreign invaders, first military and now economic, but we have always survived. Greece is a rich country in terms of physical and human resources. However, our politicians have systematically been generously bribed by Western foreigners in order to be able to rob Greece’s wealth. Also, our geopolitical situation is very attractive to world powers in their struggle to govern the world. These days, as Germany is trying its last, and I hope unsuccessful, attempt to rule Europe and the world, is using our long-suffering little country as a guinea pig to [conquer] the rest of the European countries.
In my opinion, in Greece, a patriotic and caring government has to get out of the Eurozone. We have to have our own monetary policy to control our banks, and to have our own currency. This will be difficult, of course, because we have sold such a great portion of our wealth, but a good government can reverse this. We have to have our own monetary policy and our own central bank that we control, in order to go on to growth. Also, we have to ask the United Nations to implement the human rights clauses of international law, because Greece has a large portion of its people who are very hungry. I live in a rich suburb of Athens [and also] in Thessaloniki, and I see, in the night, old people in these suburbs, previously good-standing people who worked until 65 or 67 years of age—and all claims to the contrary are nonsense and lies—and they are searching in the waste bins in the street to find some little vegetables thrown out by other people. Also, the supermarkets in Greece ask the customers to buy rice and milk for children of families who are in absolute hunger and poverty. I have seen people, families with two and three children in Thessaloniki, who live in their own cars, they don’t live in a house. They come to the university, where there are rooms for the visiting scholars and professors to have a place to stay, and they come there to take a bath. This situation is a shame for Europe.
Also, they have loaded us with lots, with millions of refugees. The Syrian people are suffering and we have to accept them and we are caring for them, but also there are people who are not refugees. They come to Greece from a lot of other places in the world, from Africa, from Asia, from Bangladesh, from India and from a lot of other places. We don’t hate these people, we are actually helping them and we are famously, from antiquity, people with good intentions towards foreigners and visitors. But, you can’t have so many people, young people in Greece who have no work. The unemployment among the young people in Greece, from 25-45 years of age [is very high]. We have all these young people who have a lot of energy, and what are they going to do? It’s natural and logical. We have a lot of crime here, by Greeks, they will steal even one euro or ten euros. All this is known to the United States government and the European Commission and the governing parties, the European Parliament, officials who receive such high salaries, 25,000 euros per month with all the privileges. It’s a shame. At the same time, the Greek people are suffering here. Very few people are those, the politicians and their friends, who are doing well. Also people who have married [foreigners] and who have some other sources of income, like myself. I have married an Englishman, and he helps me with my 99 year old mother. I have worked for 42 years, and my salary is not enough to support the medicine and all the care for my mother. There are other people in much worse situations than me.
A patriotic Greek government should go to the United Nations and ask for the implementation of the humanistic clauses of international law, to stop paying the debt [immediately]. Later, when we start growing we can pay the debt, but the debt which is legal, not the odious debt. We have to find out which is the odious debt, with a real accounting committee.
Greece may be little and is governed by corrupt and unpatriotic governments, but it is hard to die. The Germans and whoever else will learn it the hard way, I believe.
MN: Well Professor Georganta, thank you very much for taking the time to speak with us today here on Dialogos Radio and the Dialogos Interview Series, and for sharing your views and insights with us. Best of luck with your continued efforts.
ZG: Thank you very much for letting me express my opinion here, and to have foreign people understand what the truth is, because the truth is hidden under the carpet in Greece. [I would like to add] that Greek people can go on with only bread and olives to feed themselves, if they have hope that we are going to get our country back and we are going to have some growth. They can suffer some sacrifices and be happy about it, but now they have lost hope and they are desperate and a lot of them commit suicide. We can survive if we get out of the terrible euro which is a disguised German Deutschmark, which serves only German interests and nothing else.
Please excuse any typos or errors which may exist within this transcript.