Brussels gets new power to vet Treasury figures

The European Commission will have new powers to vet national economic statistics under an agreement being approved today.

Five years ago the UK rejected the idea of stepping up EU surveillance of the Treasury’s economic calculations and statistics.

But now, in the wake of the economic downturn and revelations about the true state of the Greek economy, Financial Secretary to the Treasury Mark Hoban is nodding through a deal allowing commission statistical experts to carry out “methodological visits” on national exchequers when necessary.

The former Greek government hid the scale of the its debt and deficit levels, leaving the incoming government to impose drastic public sector cuts and clear up the economic fall-out.

As the scale of the Greek crisis emerged, EU officials said they had no choice but to accept the official economic data from Athens.

But under new rules being finalised in Luxembourg, the EC will be able to send in number-crunchers from Eurostat, its statistical office, to vet figures from any member state – subject to strict criteria.

“Nobody is going to be launching unannounced dawn raids on national treasuries,” said one official.

“The new provisions allow for visits to check on the economic maths, if there are reasons for concern – such as national figures being revised at short notice without obvious reason – or other signals that something may be wrong with the calculations.”

The rule on statistics was the first legislative proposal from European Commission president Jose Manuel Barroso after his reinstatement for a second commission term late last year.

By then the full impact of the Greek domestic crisis was clear and member states faced pressure to reverse earlier resistance to new checks and balances on national economic figures.

The UK, Germany, France, Portugal and most other governments which had originally deemed the plan a step too far, relented.

“This is long overdue and we are extremely pleased that member states have now accepted that it is needed,” said a commission spokesman.

“In the wake of the Greek case, where the economic figures were manipulated, the new rule now allows for the supervision that is necessary to be undertaken by officials from Eurostat.

“As in the Greek case, where the figures were manipulated, this now allows the supervision that is necessary to be undertaken. But this does not impinge upon member states’ sovereignty”.

A UK official said: “We originally rejected this idea, but we’ve now discovered just how bad the Greek situation was, and there’s an appetite to make sure it doesn’t happen again. A lot has changed in the last few months, and people are ready to accept some things that they would not have done just a short time ago.”

The commission will not have such an easy ride on other aspects of the new raft of “economic governance” measures on the table: Chancellor George Osborne has already made clear during two recent visits to Brussels that while Britain wants to help improve economic cooperation, he will not cede economic sovereignty.

Mr Hoban, taking part in the latest round of talks in Luxembourg, will repeat that a commission plan for Brussels to see national annual budget programmes in advance – before they have been approved by national parliaments – is a non-starter in London.