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.