Greece remains Europe’s deadweight anchor as corruption reigns

LONDON — Europe has once again found itself in crisis mode with Greece at the centerfold weighing down the ship, and creating a déjà vu atmosphere among politicians and market watchers alike.

Political uncertainty and fears that Greece will have to call snap elections early next year if the coalition government doesn’t muster a way to secure a 180-majority backing for their presidential candidate, have left investors scurrying to sell off Greek bonds.

Following efforts by the European Commission, European Central Bank and International Monetary Fund — known as the Troika —to prop up Greece, investing 240 billion euros over recent years, the threat of victory for Greece’s left wing anti-bailout Syriza party in parliamentary elections has rekindled old fears of a “Grexit” or exit by Greece from the Eurozone.

While Prime Minister Samaras’ statements that Greece is ready to leave the agreement won him a confidence vote among lawmakers in Greece, the international community appears not to “trust the Greek administration to continue with reforms if the troika leaves.”

And should they? Up to date, Greece’s efforts at reforms have remained piecemeal, as problems of corruption responsible for the contagious sovereign debt crisis are still alive in the country’s daily life.

In fact, Greeks list corruption as the main source of its hatred of government, according to a Gallop survey, More than 90 percent of those polled saygovernment is a vehicle of corruption. But are things really that bad or is this just another case of the Greek tragic gene acting up?

Even soccer, one of the few elements that gives Greece positive headlines, has also been tainted by corruption. Evangelos Marinakis, shipping boss and owner of the champion Olympiakos FC soccer team, is accused of appointing favorable referees and threatening journalists.

Marinakis — a millionaire, councilmen and powerful figure — has managed to use his privileged position in Greek society to go unpunished, with the Hellenic Football Federation and justice system standing on the sidelines.

The Greek government’s failure failing to eradicate corruption among its ranks is compounded by enforcing legislation that will protect those guilty of wrongdoing from the reach of justice. A 100-page bill adopted earlier in March by the Greek parliament will protect thousands of state workers from any future corruption prosecutions.  

The new measures have sparked outrage among critics who see efforts to battle corruption vanishing into thin air. The Association of Greek Judges and Prosecutors also chimed in, claiming that frequent and incoherent changes to the law are raising questions whether the laws are meant “to serve purposes beyond the national interest.”

Immunity for its political elite has created a situation where the ordinary population continues to bear the brunt of Greece’s bankruptcy, while high profile individuals responsible for corruption and money laundering benefit from exculpatory processes from their crimes.

To add to the burden of public corruption, the Greek mafia continues to play its usual games, with shipping oil smuggling considered one of the greatest illegal revenue makers.

By exporting and re-importing shipping fuel, shipping companies bypass the taxman, reaping huge profits. It is estimated that over 20 percent of fuel sold in Greece is a result of this fraudulent process.

It is not surprising then that the Greek state has failed to inspire confidence in its ability to govern and that its own population sees the ruling class as toothless and illegitimate.

If Greece wants to correct its position and instill confidence in foreign investors, leaders should devise a new social contract, one based on the respect for the rule of law and transparency. Just holding elections and waving the specter of an imminent economic threat to get the population to fall in line is not what a democracy should stand for.

Pavlo Ostapenko is a strategy and management consultant for NGOs and international organizations.