Thursday, 4 October 2012

“Lagarde List” Decisively Turns Socialists into Government’s Weak Link

A major scandal over failure to pursue tax evaders is enveloping a junior member of Greece’s coalition government as it prepares to unveil some of the toughest austerity measures ever considered by parliament.

Socialist party (Pasok) leader Evangelos Venizelos was roundly criticised this yesterday for not asking authorities to investigate Greeks with large overseas bank accounts when he was finance minister. 

“The fight against tax evasion, the undeclared economy, any illegal activity that has to do with corruption, cannot be politically sidelined when large parts of Greek society are being sidelined,” said Fotis Kouvelis, leader of the Democratic Left, also a coalition member.

Greek media reported that Venizelos gave the conservative prime minister, Antonis Samaras, a lengthy list of Greeks with such accounts on Tuesday. The list, which media have labelled the “Lagarde list”, is alleged to have originated with former French finance minister Christine Lagarde. Samaras passed it on to judicial authorities for further investigation, the unsourced media reports said. The prime minister's office had no official comment.

The blaze of publicity caused consternation within the government, opposition and socialist party itself, because Venizelos had been in possession of the list since his tenure as finance minister, from June 2011 to March this year.

Venizelos said his predecessor, Yiorgos Papakonstantinou, had sent the list to the financial crimes squad, which considered it unusable because it was “a document that had not come through legal channels and could not legally be processed, much less made public.”

The scandal comes at the worst possible time for the three-party coalition, as it prepares to bring a weighty package of 13.5 billion euros’ worth of austerity measures to parliament.

The radical left opposition, Syriza, seized upon the opportunity to attack the socialists, who are emerging as the government’s weakest link.

“The fact that Venizelos led Pasok through two elections while keeping the Lagarde list hidden in his drawer is a major political issue,” said Zoe Konstantopoulou, a Syriza MP. She dismissed Venizelos’ remonstrations about the list’s legal unsuitability as “monumental idiotic cunning (κουτοπονηριά).”

“The list was delivered institutionally by France’s finance minister, Christine Lagarde, to her  Greek counterpart, Mr.  Papakonstantinou. It was an official document… and its use was not only permissible but entirely mandatory,” Konstantopoulou said.

Greece has lost a fifth of its economy during the crisis, and nominal unemployment stands at 24 percent. Samaras told German Chancellor Angela Merkel that Greeks have lost a third of their living standard when he visited Berlin on August 24.

In the wake of the scandal, former socialist interior minister Yiannis Ragousis on Wednesday resigned from the socialist party, calling the fudging of the Lagarde list “politically unethical and socially outrageous”.  

Ragousis said “The list concerns… the decisiveness or not to strike tax evasion with the same strictness with which incomes were cut and new taxes were imposed.” He said Pasok had come to fully represent the values “which led Greece to bankruptcy and moral degradation.”

Venizelos waved away the discussion about the list as damaging to Greece’s negotiations with Switzerland on a bilateral treaty to tax Greek accounts there.

Pasok's fortunes have been failing even after it fell from power in elections this year, which saw its support collapse from 44 percent of the popular vote to 12 percent. A Rass poll published on September 23 measured its popularity at 8.2 percent. A Metron Analysis poll published the following day put it at 7.3 percent.

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