by Jacob Sol
New York Times
January 20, 2015
Greece is back as a focal point of the world financial crisis. While coming elections are spooking the markets, the supposed cause of the crisis has not changed. Greece has a declared debt of 319 billion euros, or about $369 billion, 175 percent of its 182-billion-euro ($210 billion) gross domestic product. This sounds like a nearly impossible task for any government: to govern effectively, spur economic growth and avoid default. The shackles of the declared Greek debt have effectively paralyzed the country. Yet maybe all of this debt drama is unnecessary.
The way this story is usually told, inside and outside Greece, is as a morality play: the profligate Greeks don’t pay taxes and their banks and elites, in turn, rob Greek citizens and foreign investors alike. The Greeks, it seems, need to be held accountable and to pay back their debt at any cost.
The brutal and counterproductive response has been austerity. But given Greece’s problems, what the country really needs is transparency and accountability. Greece has a very weak tradition of accounting, with few homebred trained accountants. The government does not use International Public Sector Accounting Standards, or Ipsas, which measure liabilities and assets over time, similar standards to those used by leading governments, businesses, banks and investors at all levels. It’s of little surprise that without internationally verifiable accounting standards, no one feels the need to be accountable.