Greece’s request for a bail-out – an historic first for any nation using the euro – was ultimately triggered by disclosure of unexpectedly bad new audit figures about Greece’s finances. Amid intense market pressure on Greek government borrowing, the revelations left a bail-out as the only alternative to a Greek default on its sovereign debt. The episode highlights the recent history of shoddy national accounting about government deficits by Greece (and some other EU member states). Certainly in the Greek case it strongly undermined the government’s financial credibility.

