Almunia wants code for Member State finances

By Anna McLauchlin

Date: 16/12/04

IN THE wake of the discovery that the Greek government managed to conceal the true state of its accounts for seven years and uncertainty over the reliability of figures submitted by Italy, the European Commission will launch plans on Wednesday (22 December) to tighten its grip on national public finances.

The Economic Affairs Commissioner Joaquín Almunia will present a communication to the Council of Ministers and the European Parliament outlining several proposals.

First, there will be a proposal to enhance the power of the Commission's statistics body, Eurostat. At the moment Eurostat, which is responsible for checking national finances, has the right to go to national ministries to discuss their accounts, but if it suspects a problem it is not allowed to look at the original data or to change the figures. The only thing it can do, which it did for Greece's accounts, is to put a footnote on the bottom of the submission outlining its fears that the data submitted may not be correct.

Under the new rules, Eurostat would have the right to launch a 'mission' to any member state at any time and request access to any data included in the calculation of its public finances.

The Commission would boost the manpower both in Eurostat and in the Commission's economic and monetary affairs department to plan longer and more in-depth missions.

It would also call on national experts to help Eurostat assess the state of affairs in any particular finance ministry.

Lastly, the EU executive will propose adopting a European code of conduct for national statistical institutes enforcing their independence and responsibility. It could impose "minimum standards" on the way in which statistics authorities work together to avoid a repeat of the Greek situation, where Eurostat, national finance ministries and central banks were blamed for not noticing or revealing Athens' deficit cover-up.

Almunia has already said that the Commission will adopt legislative proposals "as soon as possible". An official told European Voice that the first two are expected in early 2005 and the code of conduct by June.

In the wake of the discovery that the Greek government has managed to conceal the true state of its accounts for seven years and the uncertainty over the reliability of figures submitted by Italy, the European Commission is planning to launch proposals on 22 December 2004 to achieve tighter control over national public finances.