Category Archives: Economy

On ship-owners, bishops and Golden Dawn

The crucial journalistic question on Golden Dawn has been one for the past year. Who funds Golden Dawn?

For a long time there have been rumours that one or some ship-owners were behind them but no one has managed to document something tangible. It seems that this is changing.

Greek financial portal sofokleousin.gr has published a very interesting article a while ago. Though the portal quotes well-informed sources who spoke under the condition of anonymity, it mentions that there is an ongoing investigation of the Financial Crime Unit (SDOE) on the funding of neonazi party Golden Dawn.

The investigation, according to the article, has shown so far that several ship-owners, businessmen and even bishops are behind the far-right party and its criminal activities.

The article also says that among the party’s funders there are people beyond any suspicion, though some of the involved businessmen are serving a sentence in prison while others have trials pending. The data found so far imply a link between the members/local Golden Dawn offices and businessmen who have night clubs or are involved with sports (I guess some football team – not the cleanest sport in Greece). The data are already being used to document crimes like blackmail, threats or even paid assassinations.

The Financial Crime Unit has already asked the opening of several bank accounts so that they can document these investigated financial links with facts and proofs

According to the article, the investigation has showed that among the clergy there are even some bishops (!!!). The Prime Minister’s office has been briefed about the investigation, says sofokleousin.gr, and the PM’s advisers are doing their best to avoid any early leaks to the press.

Which they just failed to do.

The honest truth about dishonesty… and tax evasion

I recently watched this short animated video on Dishonesty.

I immediately started drawing parallelisms between the video and the whole Greek tax-evasion story. In many discussions with foreign journalists I have been asked to give my opinion on tax-evasion in Greece. It’s true that Greek citizens were inclined to evading as many taxes as they could and, to tell you the truth, they were feeling pretty fine with that. Why? Because the model was coming from above, from the political establishment and the business elite. They were and still are setting the example. The international press has only recently discovered the laters’ responsibility, hence the amount of articles and features on the lives of rich Greeks.

The RSA video gives an example of how the overall damage by numerous small cheaters can sometimes be bigger than the total damage of a handful of big cheaters. I sincerely believe that this is not the case for Greece. Credible data are not available to demonstrate that the amounts lost by the political establishment and the business elite’s practices are much bigger than the amounts lost by buying something without a receipt. And, in addition, many of the cases are much more complicated and at some point we are talking about a sort of a “double entry” to our tax-evasion database. For example, where do you categorize the damage of a lost public income from an unpaid tax fine? Under the citizen who did all he could to avoid paying (small cheater)? Under the tax officer who accepted the bribe (medium cheater)? Or under the politician who intervened to the local tax office so that the citizen, a friend (i.e. a potential voter) gets treated with preference (and yes, he is a big cheater because he is hoping for thousands of votes to get re-elected)?

In September 2010, the then vice-chairman of the Greek government, Theodoros Pangalos, has given the following speech at the Parliament.

Translation: The answer to the people’s angry question that is directed against the politicians of the country “how did you eat [spend] the money?” is this: We hired you. We ate [spent] them all together. In the framework of a relationship of political clientelism, corruption, buying and ridiculing the very sense of Politics itself.

Speaking about the responsibility of political clientelism in the Greek crisis, though true, he unashamedly blamed the small cheaters (i.e. voters) in order to cover the big cheaters’ (i.e. politicians) damage. Paradoxically he fell in his own trap by admitting that he is a big cheater. It was such an unashamed statement that he even created a website where people would input their own stories. And in the end he turned the whole story in a book which is sold on the website.

In what society do leaders depend on individuals to set a prudent example for the politicians?

It’s this unanswered puzzle, that will never be answered in consensus, that has prevented any move forward to be fully legitimised, especially when the move forward is driven by the same people who brought us here. Society was, is and will be strongly divided among these things, left or right, cheater or honest, public sector employees or private sector employees, clean or dirty means of accumulating wealth, what did you or your father do during the good years, etc (the duos’ list is almost infinte).

It seems that these divisions are here to stay. There are few attempts, and certainly not from the politicians’ side, to ease them (see the recent strike of the Athens Metro employees where it was attempted to turn passengers against strikers). They actually take advantage of these natural and artificial divisions, turning one part of society against another, which explains why the traditionally angry rioting Greeks have not been able to form a common front in order to create a “new page” as the video suggests. And we so desperately need a “new page” in order to re-start writing our history. Looking at some international examples, nations with a dirty past opened a “new page” with the creation of a Truth Commission (e.g. South Africa). We, in Greece, haven’t even dared to launch an independent audit about our public debt. The former-communist countries had another tactic. A process that was called “lustration“, i.e. a cleansing.

Well, we need one too in order to inspire people to become honest again. Like their politicians.

PS. Funnily the RSA video refers to the financial crisis at the end too.

Why Rapanos denied the FinMin post

Now that Vassilis Rapanos is officially not the new Finance Minister of Greece, here’s a translation of a possible backstage explanation of why he took that decision.

Vassilis Rapanos, almost Greece’s new Finance Minister

First of all, Rapanos did not resign, he simply denied the post, since he hasn’t managed to take office yet. According to enikos.gr, Rapanos has asked to work with several colleagues of him with whom he has worked in the past. According to Greek journalist Nikos Chatzinikolaou’s portal, these colleagues were Yiannis Stournaras, Tasos Giannitsis and possibly Alekos Papadopoulos. Up until the meeting of the three political leaders (New Democracy, PASOK and Democratic Left) in which Rapanos participated, he had the idea that his demands were going to be satisfied.

However, new government spokesman Simos Kedikoglou informed Rapanos of the final team of Finance Ministry officials. Rapanos was enormously pressed by this move and his health, already troubled by a previous health issue, deteriorated. He even discussed with some people the possibility to deny the post but haven’t done so because such a move would have catastrophic impact to the image of the new Samaras administration, especially in its image towards Europe. On Friday morning he visited the Ministry where he was supposed to officially take office but, under the pressure of the circumstances, he fainted and was transferred to the hospital.

Enikos.gr mentions people close to Vassilis Rapanos as the sources for the above information.

Catastroika goes public

Catastroika's poster

Here is the new crowd-sourced documentary by Aris Chatzistefanou. It’s called Catastroika (click here for Greek or English subtitles) and was just released for online viewing. I copy from the team’s website:

It was at the beginning of 1989 when the French academic Jacques Rupnik sat at his desk, in order to prepare a report on the state of the economic reforms in Mikhail Gorbatsov’s Soviet Union. The term that he used in describing the death rattle of the empire was “Catastroika”. In Yeltsin’s time, when Russia instituted maybe the biggest and least successful privatization experiment in the history of humanity, a group of Guardian reports assigned a different meaning to Rupnik’s term. “Catastroika” became synonym of the country’s complete destruction by market forces; the sell off of public property; and the steep deterioration of citizens’ living standards. Now, Catastroika’s unit of measurement was unemployment, social impoverishment, declining life expectancy, as well as the creation of a new cast of oligarchs, who took over the country’s reins. A few years later, a similar effort to massively privatize public property in unified Germany (which is presented as a model for Greece) created millions of unemployed and some of the biggest scandals in European history.
It is this “Catastroika” that is coming soon to Greece; to “Europe’s last Soviet Republic” as the MPs and the ministers of its former “socialist” government liked to call it. Catastroika is the logical aftermath and continuation of “Debtocracy”. Therefore, the logical sequence of our first documentary, which examined the causes of the debt crisis in Greece and the European periphery as a whole.
For more info click here.

Spinellis sued

Remember professor Diomidis Spinellis?

Well today he tweeted that he was sued by Charalambos Nikolakopoulos, chairman of Tax Office employees’ trade union (POE DOY) after Spinellis gave a speech at a conference on “Tax Evasion and Social Justice”. In his speech Spinellis referred to “widespread corruption in the tax collecting mechanism” – a reference for which POE DOY now accuses him of libel.

Diomidis Spinellis' tweet

The Tax Office Employees’ trade union, in its statement, said:

The period of silence and attacks against our Federation, has gone for good. From now on we will react with all available means to defend the honor and reputation of hard working tax service employees. Let those, who (for many years) have thrown their political and administrative responsibilities on the tax service employees, understand the message.

It’s a strange statement, sounding more like a bullying or a blackmail. For some people the mere reference to political responsibilities might look as an indirect admittance of being guilty of corruption. It’s like saying “if you keep putting the blame to the corrupt tax office employees, we’ll disclose the names of politicians and their administrative puppets who were involved in this corruption“.

Mr. Spinellis created a page where he invites people to tell their own personal story of corruption in their transactions with the Greek Tax Office. He intends to use these stories in his defense at court. The page can be found here, it’s only Greek.

Tell your personal story on corruption at the Greek Tax Office.

Souvlaki is still king

Here’s an excerpt of “Souvlaki is still king despite crisis”, an article I read  recently at ekathimerini.com . Another example of an industry which turns this crisis into an opportunity (another example is the porn industry and Johnnie Walker whiskey). Anyway, here’s the excerpt.

Souvlaki with pitta bread

Souvlaki, the undisputed king of Greece’s street food, has yet to feel the bite of the debt-wracked nation’s financial crisis.

Despite a steady drop in the country’s fast-food business since 2009, when the debt crisis started to unfold, the number of souvlaki joints, known among locals as “souvlatzidika”, has actually grown, Kathimerini understands.

Greeks reportedly consume an estimated 3 billion souvlakia, comprising small pieces of meat grilled on a skewer, every year. Greeks reportedly spend a total 2.5 billion euros on souvlakia per year.

Between 1992 and 2008, the local fast-food industry grew at an average of 15.2 percent each year as souvlaki, pizza and snack/sandwich shops proliferated and armies of food delivery bikes roamed city streets.

You can read the full article here.

This is Memorandum No2

These are the basic decisions that have been agreed in the so-called Memorandum No2.

TAXES AND SPENDING

• Greek leaders have agreed to spending cuts worth 1.5pc of gross domestic product (GDP) this year, or €3.3bn (£2.77bn). By Thursday morning, savings had been agreed to cover all but €300m of that amount.

• The cuts include €400m from public investment, €300m from the defence budget and €300m from pensions.

• In June, whichever government is in charge following expected elections will have to specify additional austerity measures worth €10bn for 2013-2015.

• Greece will be given an extra year, until the end of 2015, to meet a primary surplus target (excluding interest payments).

Bank recapitalisations

• Banks with major problems will be recapitalised with common voting shares while those with lesser problems will be recapitalised with bonds convertible into shares with restricted voting rights.

Labour reform

• The minimum wage will be cut by 22pc. However, this will not drag down the entire wage scale, applying only to new hires. New entrants into the labour market, i.e. those getting their first job, will receive a sub-minimum wage 30pc below the current minimum wage, which now stands at about €750 (this is around 590 euros after tax). Those under 25 will be affected the most.

• About 15,000 state workers will be placed in a “labour reserve”, meaning they will be placed on partial pay and dismissed after a year.

• The government aims to cut the state sector workforce by about 150,000 people by 2015.

Source: Reuters

Greek news portal Capital.gr has a link for the full draft text here. (some pages are missing – no explanation why).

UPDATE: Here’s a more complete version from Greek web news portal in.gr

A possible explanation for the missing page 20 (one of the missing pages from Capital.gr is a handwritten note saying “Goodbye debt, Goodmorning poverty”. It’s still unknown who’s notes these were.

Stuck to the euro

"Despite everything, I remain in the eurozone" by Giannis Kalaitzis

On the Greece Debt Free campaign and other charitable initiatives

I was reading about a new Greek beer that is produced on the island of Santorini, famous for its volcano and magic scenery. The beer is, not surprisingly, called Volkan and is brewed with rare Cycladic ingredients. Its brewing method includes the conditioning of the water using Santorini basalt in a so-called “Lava Rock Filter”.

Volkan beer

I visited their website and noticed that the brand is part of a campaign called “Greece Debt Free” (GDF). It means that for every euro spent on their products, 50 cents will be donated to reduce the Greek national debt. So far the only member of the GDF campaign is Volkan beer. Here’s their Facebook page and below you can watch their promo video.

The whole campaign is aiming either to the patriotic feeling of Greek consumers (help your country while sipping your beloved beer) or to the charitable feeling of tourists (while you’re having your holidays in Greece, help this poor country). My excitement about a new creative Greek product, at a time when Greece is obviously producing less and less, has been compromised by the whole idea behind campaign like GDF. What’s the point? Are we supposed to get drunk in order to help Greece get out of the mess? What is the GDF-supported company’s role in this chaos? And what if we manage to save Greece with the GDF campaign, as their vision suggests? The wrongdoings of those in power who mismanaged Greece for all these years will be forgotten. They, not just Greece, will be saved. No justice will be done. And, of course, it will be repeated. Simply see the criticism on charities to understand what I mean.

My objection to such initiatives is that there is no reference to responsibilities. Who brought us here? According to the mainstream narrative, we face the crisis as a natural catastrophe. Well it’s not. There have been people in power (and behind it) who took decisions and hold a part of the responsibility. And if Greece’s financial problem will be solved by offerings and donations, nothing will change.

On another similar occasion I remember, last Spring, when I passed by the Greek Embassy in Belgrade, Serbia. There was a notice board where people were invited to donate money in order to reduce the Greek public debt. Like a charity’s box over the counter of a grocery store. “This is where we’ve ended” we said with my friends. Where has this country’s dignity gone?

"We love Greece - We support Greece" says the poster outside the Greek embassy in Belgrade, Serbia.

Apparently, there was no funds for a special printing of the poster in Serbian, so the poster is fully in Greek. I guess these posters were printed by the Ministry of Foreign Affairs and were distributed in Greek embassies worldwide. I wonder how much money this campaign managed to raise.

Like a virgin

This is a great example if you want to see how a responsible Greek politician behaves in times of crisis. In May 2010, when Greece was about sign the IMF/EU/ECB Memorandum, Michalis Chrysochoidis was not just another Socialist MP but the Minister for Citizen Protection (one of the high profile government posts). Yesterday he was invited to talk to a news program at SKAI TV. The discussion was around a recent criticism on the terms of the Memorandum, highlighted by former Prime Minister Kostas Simitis’ speech at a conference in Berlin. This is the video excerpt from SKAI TV and below a quick translation.

Journalist: Let me ask you directly. How many hours did it take you to read the Memorandum? Because Mrs [Louka] Katseli (the then Minister for the Economy, Competitiveness and Shipping) said yesterday that she was given the Memorandum on Saturday night and spent two hours on reading it and this is how she went to vote on it. Have you read what the creditors have written down and did you have a different opinion than theirs? Were you aware of what you were about to sign?
Chrysochoidis: Are you serious?
Journalist: Absolutely.
Chrysochoidis: These things were discussed in the Parliament… No, I haven’t read the Memorandum at that time because, simply, I had other obligations. I had other duties…
Journalists: Excuse Mr. Minister, this is very serious. How did you sign it? Did you sign a text that commits the country for an eternity and that is responsible for the mess in which we are now and you are telling us that you didn’t read it? How can you say this so easily?
Chrysochoidis: Look, in politics things are not like that. 
Journalist: How are they?
Chrysochoidis: Some of my colleagues had negotiated, some of the responsible members which represented the government had negotiated and brought that legislation into the Parliament and, as you remember, it was voted by the majority of the Parliament, by PASOK and LAOS if I remember well.
Journalist: Is there a direct responsibility on the economic staff of the then government [i.e. the Minister of Finance George Papaconstantinou]?
Chrysochoidis: As I told you before, it was done so under a state of panic in view of a possible suspension of payments which was a threat over our head. My job at that time was to re-organize the Police, the Fire Brigade, to create the DIAS team [a Police group which patrols in motorbikes], to fight crime. It was not my job to study the Memorandum.

So Mr. Chrysochoidis just said that he signed one of the most important legislation passed in this country without even reading it. He just went the next day to the Parliament and voted for it like an amateur politician. Like a virgin! He didn’t have the time because he was re-organizing the Police which indeed showed a great zeal to crush the demonstrations taking place in the center of Athens. It was the same days when three people were burned in the fire of Marfin Bank, a collateral damage of that day’s violent chaos. The DIAS team were roaming the streets like horses of the Apocalypse, attacking protesters. And yes, crime, there wasn’t much of it that day because the political head of the Police devoted all his time on the issue rather than having a look at the Memorandum.

Katseli & Chrysochoidis

Louka Katseli and Michalis Chrysochoidis getting bored during some speech (it was probably an important one)

Some key things to note which will make some (more) sense. There is a widespread criticism on the terms of the Memorandum even by PASOK MPs, now that the old PASOK (that of George Papandreou) is crumbling. Everyone one is trying to clear his/her name, to distance themselves from the shame of “having been part of it”, preparing for the next day, or simply for the coming elections. Let’s not forget that Mr. Chrysochoidis has declared that he intends to challenge for the PASOK leadership which will be decided very soon. But let’s not be in a hurry and put all the blame to Chrysochoidis for simply telling us the truth. Most, if not all, of the MPs had literally a few hours to read the Memorandum. Among the virgins, there were some prostitutes too.

Here’s an excerpt from an older post that I’ve wrote (The run up to the Greek economic crisis) – it is a translation by an article of To Vima’s journalist Pavlos Papadopoulos.

“We were like prostitutes after their first time” a top government official confessed in his attempt to describe the Cabinet member’s psychological situation during their meeting to sign the Memorandum, on the 5th of May 2010. “We were looking at each other and we were all pale” he says. “We felt very ashamed since we couldn’t believe that we, PASOK, led Greece to the IMF, having chopped the salaries and the pensions”. And then he concludes “Since then we have been completely prostituted. We’ve done the same things over and over again without feeling any shame”. Almost all PASOK politicians admit in private that the Memorandum, despite its provision of some necessary reforms, is synonymous at the same time with the sentencing of the economy to a prolonged depression and with the mortgaging of the country to its lenders. However they recognize that it was the last choice in order to avoid bankruptcy and to secure the savings and the pensions, especially since the government had previously failed to implement the prior solutions.

“The Memorandum was hastily written by us and the troika” admits a high-ranking government official who participated in the (so-called) negotiations. “We had no idea of what we were writing and the troika experts were equally confused, working under great pressure from the European Commission and the IMF”. According to first hand accounts, the slightest preparation hasn’t been made and simply, on the last moment, they isolated part from older IMF Memorandums as those with Turkey, Mexico or Hungary and they would hurriedly adapt them to form the Greek Memorandum. “It’s a bad compilation, a Frankestein-styled Memorandum” says a Minister who admitted that he had less than three hours to read, understand, evaluate and approve the part of the agreement which would commit his Ministry for the next four years.

Obviously this Minister was not Chrysochoidis.

Michalis Chrysochoidis is currently Minister for Development, Competitiveness and Shipping.