Tuesday, 4 September 2012

Former Minister Blames Recession on Corrupt Parties

Socialist former minister Tasos Yannitsis has delivered a scathing criticism of the Greek political system, blaming corruption for the country's current recession and the failure to turn the economy around.

"Contrary to what [Jean-Claude] Juncker said in October 2009, "the game is not up"," Yannitsis writes on the website protagon.gr. "The game continues under different circumstances, and that is why reality is becoming more and more difficult." 

In October 2009, Eurogroup president Jean-Claude Juncker exploded with the phrase, "the game is up," in a meeting of finance ministers in which Greece revealed that its deficit that year would be three times what was originally forecast. Juncker was referring to the practice of statistical fiddling rather than political corruption.

Yannitsis phrased his polemic as a second-person response to Theodoros Pangalos, who as deputy prime minister in the last socialist government (September 2009 - November 2011) caused a media uproar when he suggested in parliament that Greece's voters and politicians had colluded to "devour" the public wealth and create a mountain of national debt over the years. 

"Many people publicly or privately 'devoured' [the public wealth]," Yannitsis writes. "Scandals were a part of that scene. But so was so much superficially legal behaviour... When, for instance, the state administration needs no new hires yet thousands of positions are advertised, or when a public project is redundant yet it proceeds at a cost of millions so that bribes may be paid, or when institutional decisions are made that confer scandalously rich benefits upon groups of citizens, these things are usually done in a legal manner. But in fact what we're talking about is an egregious theft and waste of public resources," says Yannitsis. 

"All this was not innocently done. It was the result of... a political mentality which saw that it could practice politics in a way that consciously led to nominal social and economic benefits, but real party political benefits, distorting reality and unconscionably sending the bill to future generations."

Yannitsis says Greece's economic collapse was the inevitable result of over-borrowing to bestow political favours, regardless of the 2008 financial crisis. "By constantly borrowing - and in the last decade being especially lenient towards private borrowing as well - an ever-greater proportion of all this - income, public projects, growth - was transformed into a giant with feet of clay that couldn't possibly fail to collapse, either as a result of the crisis or on its own."

Yannitsis, an economist, has been frustrated in past efforts at reform. He found himself at the centre of a storm of disapproval as labour minister in 2001, when he suggested transforming the state-sponsored pension system from a defined-benefits to a defined-contributions system in a effort to guarantee its viability. The Greek social security system has duly unravelled during the crisis. Pensioners have seen their benefits cut by as much as 50 percent. Greece's largest insurer, the Social Insurance Foundation, which extends health and pension coverage to  about half of Greece's population, is currently bankrupt. And pharmacists are  refusing to honour prescriptions to over 90 percent of insured Greeks unless they are paid in cash.

As interior minister earlier this year, with Greece in its fourth year of recession, Yannitsis suggested reducing party financing from state coffers by 20 percent to roughly 40 million euro, and tying it to voter turnout rather than tax revenues. Instead, parties rushed through parliament a bill that approved 20 million euro in  campaign spending for the May 6 election.

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