Authors: Panagiotis Papadeas

Title: Accrual Principle of Accounting and the former President of ELSTAT

Abstract

This paper examines the reliability of National Accounts, which include, among other things, indicators for the deficit as a percentage of GDP and the debt necessary to monitor the fiscal discipline of the Eurozone member states. The reliability of these statistical data for the Greek economy affects the confidence of international observers, researchers, and rating agencies towards the agency that publishes them, namely the Hellenic Statistical Authority (ELSTAT).

First and foremost, the mandatory adoption of the European Public Sector Accounting Standards (EPSAS) requires the use of the same accounting standards at all levels of government. This is why in our country, Presidential Decree 54/2018 was enacted regarding the content and timing of the implementation of the General Government Accounting Framework, which made it mandatory for the preparation of state budgets from 2019 onwards. In this framework, the proposed financial statements, apart from the Cash Flow Statement, are based on the assumption of continuous business activity and accrual accounting. Classification follows the standards of the European System of Accounts (ESA) and the Governmental Financial Statistics Manual (GFSM).

In our country, ELSTAT (Presidential Decree 73/2019) includes, among other things, the European Union's Code of Practice (COP) and the statistical reporting requirements regulation of entities within the Greek Statistical System (GSS), up to and including the National Accounts Directorate for the estimation of GDP. The above-mentioned standards share the concept of "accrual accounting" and the common difference between reliable and unreliable national/European statistical results is the application or non-application of the revised procedures accepted by Eurostat.

It is evident that reliable European statistical information should not depend on individual national strategies but on the common European processes accepted by Eurostat. It's worth noting that the former president of ELSTAT took office in August 2010. By May 2010, we had already signed the first memorandum based on revised but temporary data, with a deficit of 12.5% for 2009. According to the accepted methodology of Eurostat (ESA 2010), ELSTAT completed the process in November 2010, resulting in a deficit of 15.4% for 2009. This calculation included the deficits of Public Corporations (such as OSE), which contributed to the public debt by 4-5 percentage points.

This process/methodology was fully accepted internationally and serves as the basis for drafting/depositing the annual regular budgets for 2012-2023. Through the financial data for 2019-2022 provided by ELSTAT

For example, the necessary "European decryption" of the deficits of Public Corporations could provide a strong incentive for restructuring the dysfunction of certain state-owned enterprises, such as OSE, by the country's political personnel, without personal, guild-related, or party interests.

Therefore, the simultaneous implementation of different European accounting, statistical, and auditing standards for the reliability (and grading) of our country's financial data requires strong and independent institutions, beyond fiscal health, development momentum (recovery fund), and primary surpluses.