Who monitors public finances?

Following the revelation that Greece has been underreporting its
public deficit since before it joined the eurozone, CEPS Director
Daniel Gros proposes, inter alia, the creation of (national)
Independent Budget Agencies.

The new government in Greece has all of a sudden
found out that its predecessor has been mis-representing for some
time the true situation of public finances. The size of the data
revisions has been extraordinary: the deficit estimate for this
year is now 4.6 % of GDP, almost 3 percentage points higher than
the previous reported 1.7 % % of GDP.  The cumulative impact
of the revisions can be seen in the figures for public debt, whose
figure for end 2003 went up from about 103 % of GDP to close 110
%.   With the new figures Greece now beats Italy to be
the country with the highest debt/GDP ratio.

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