Remember meForgot password?
    Log in with Twitter

article imageOp-Ed: Greek political parties can't manage their own finances

By Katerina Nikolas     Sep 27, 2012 in Politics
Athens - What hope is there for the Greek economy when the political parties in charge of the nation's finances are incapable of managing their own party funds and are millions of euros in debt.
If ever proof were needed that politicians are not fit to run a country's economy it is the example set by the politicians in Greece. The debt-ridden nation that is technically bankrupt and in hock to international creditors that have usurped the democratic process by demanding Greece knuckle down to imposing austere measures on its citizens, is run by a bunch of hopelessly inept politicians who have demonstrated they cannot even keep their own political party funds in check.
An excellent account of Greece's party political debts is provided by George Georgiopoulos and Stephen Grey in Ekathimerini. They state the political parties, New Democracy and PASOK, which were the two parties which dominated Greek politics until this year's election, are "close to being overwhelmed by debts of more than 200 million euros." Due to a political process which gives the parties with the largest share of the vote the greatest amount of public funding, the two parties are in debt to the Greek banks but face falling revenues when the next slice of public funding is allocated next January.
Figures cited by Ekathimerini show that in 2011 PASOK received €21.7 million of public funds; New Democracy €16.9 million. Greek taxpayers hand over three times as much cash to political parties than their German counterparts and Greece ranks fourth in Europe for the amount it gives for political funding.
In April Keep Talking Greece reported Greek politicians voted themselves a lump sum payment of €29 million in order to finance their election campaigns. On top of the funding allocated to the political parties the elections placed an additional financial burden on Greece.
The first, inconclusive election in May cost €70.4 million, according to the Wall Street Journal. The second election in June cost an additional €47.9 million. Politicians took no heed of the cost even though the second elections proved to be totally unnecessary as Democratic Left leader Fotis Kouvelis eventually caved in and accepted terms he refused after the first election.
A PASOK party member told Ekathimerini that political funds had been badly handled, pointing out that the debt ridden party had spent money on building a fully-equipped gym at its party headquarters. Incidentally politicians already have access to a fully-equipped gym in the Vouli. This at the time PASOK was in power and negotiating the first round of austerity measures with the Troika.
Just as a housewife must balance the household budget and understand that one cannot borrow ones way out of debt, a political party must balance its books and a government should not spend more than it raises through tax revenue.
Greece's political parties' debts have done more than just expose their incompetence in handling financial matters. It has led to a conflict of interest between the parties and the banks they are indebted to.
According to Leandros Rakintzis, Greece's independent inspector-general of public administration: "This is all about the exchange of favors. These parties cannot pay the debt so it's a vicious circle in which they come to depend on the banks. It creates an interdependence of politicians and banks."
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
More about Greek political party funding, Greek banks, PASOK, New Democracy, political funding
More news from
Latest News
Top News