Four of the largest international audit firms will help the Greek government to implement the announced financial reforms in the public sector, by appointing in each ministry two representatives of the supervisory companies. Deloitte & Touche, Ernst and Young, ΚPMG and PriceWaterhouse Coopers will oversee the implementation of the budget and will carry out special inspections in ministries and public organizations which show great expenses or are suspected of financial irregularities. In 2011 is expected to be introduced also a comprehensive electronic information program that will allow tracking of all costs of the central administration, so as to avoid abuse of public resources.
At the same time after seven months of waiting, the government announced that next week it will formally appoint the new director of the Greek Statistical Institute. "We will appoint the new director of the statistical office with four-fifths majority in the parliament so as to ensure the independence of the organization," said in a formal statement before journalists the Minister of Finance Georgios Papakonstantinou. The activity of the institute will be monitored closely by a representative of Eurostat, who will have supervisory functions and will cooperate to build a new more effective system for reporting the status of the country. The government provides for strengthening of the mechanisms for ensuring timely and correct delivery of data. The Court of auditors in turn will provide monthly statements of the financial position of state enterprises as well as detailed monthly statistics for profit and loss account and late payments of state organizations.
If this series of measures is effectively implemented in practice the Government hopes to prevent future financial crises such as the one in the social security and health care. The ultimate goal of the government is to meet its obligations under the Stability and development program and to reduce the government deficit to 3% of GDP by 2014. According to official data for the first quarter of this year the Government has saved from further cuts in the public sector spending. On the other hand the gaps in the social security funds, which proved that for less than a year have absorbed most of the provided in the budget subsidies, opened new black holes for the public finances. A clear picture of the government finances is expected to come out after the full implementation of the announced economic reforms, and the second increase in VAT by a further 2 points and its converting into 23 percent from the first July. Estimates of the Hellenic Chamber of Commerce, however, are that the VAT revenues will decrease due to lack of demand already on the market as a whole.
The plan of the government is to change the meaning of the recently popular in Brussels expression “Greek statistic”, which became a byword of erroneous data. By assuming the power the socialist government of PASOK undertook a series of actions that led to the discovery that in the last ten years at least Greece has presented false data about the economic situation of the country which represented Greece a bit more prosperous than it really was. As a result, just like an avalanch of consequences first the European partners, and then international markets have lost any confidence in the Greek government and governance.
In an attempt to regain the trust of Europe and the world, the Greek government dismissed the previous management of the institute, which for more than half a year is without a chairman. During the next week is expected to formally announce the changes in the structure and activities of the organization as well as the new management.
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