New Calculations

Can Statistics Save Greece?

Source: DPA
Statistics might make it easier for this man to find a job.
  • Why it matters

    Why it matters

    The health of Greece’s economy is tied into how markets and banks view its debt situation. Improving perceptions could speed up its recovery.

  • Facts


    • Paul Kazarian is one of the largest private creditors of the Greek government.
    • By Mr. Kazarian’s calculations, Greece’s debt-to-GDP ratio is only about a third its official rate of 180 percent.
    • The poor image created by Greece’s public finances makes borrowing for businesses more expensive.
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It’s a controversial statement for a country that has long been under the watchful eye of other European governments and the markets for letting its debts spiral out of control. Paul Kazarian, a long-time financier, is tirelessly trying to convince other investors but also the Greek government, to change the way they calculate debt.

His simple accounting trick could heal Greece’s long-suffering economy. Changing the perception of Greece’s debt situation, making it seem more sustainable, could make banks more willing to lend money to its struggling businesses, which in turn could lead them to hire more people and increase consumer demand.

Mr. Kazarian is hoping to get governments to convert their way of calculating debt to the International Public Sector Accounting Standards (IPSAS), which is similar to the International Financial Reporting Standards that are common for businesses. The idea is that debts and assets should calculated not by their nominal value, but rather by their market value.

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