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A centre-right government beset by corruption allegations
The other face of GreeceA LAWYER by training, Costas Karamanlis brushes off allegations of corruption within his government by saying that he trusts the Greek judicial system. Yet a string of bribery scandals has undermined the prime minister’s approval ratings. Even some deputies in Mr Karamanlis’s centre-right New Democracy party are grumbling. They point out that the judiciary moves at a snail’s pace, lacks expertise in 21st-century financial crime and is influenced by politicians. None of the dozens of suspects under investigation for corruption has yet appeared in court.
At least one scandal has seriously embarrassed Mr Karamanlis. Christos Zachopoulos, a senior cultural official who once ran the prime minister’s constituency office, attempted suicide last December amid allegations of blackmail by his secretary. Mr Zachopoulos has been accused by prosecutors of turning a blind eye to dozens of illegal deals allowing protected sites to be developed.
The sacking in July of George Zorbas, boss of Greece’s anti-money-laundering unit, set more tongues wagging. Mr Zorbas complained that the judiciary had not backed his probe into a scandal about government bonds worth over €300m ($425m) that were bought by state pension funds at inflated prices. He could not look into offshore bank accounts used to channel proceeds from the scam. Mr Zorbas’s preliminary report, which is said to implicate several politicians, went to prosecutors, but he fears it will be shelved.
With an election still three years away, Mr Karamanlis’s laid-back attitude to such scandals might work. He has already shown himself to be a principled leader by sacking two cabinet ministers for minor breaches of the law. It helps that the opposition Socialists (Pasok) are in total disarray. George Papandreou, their pro-European leader, faces constant sniping from a discontented nationalist faction within the party. He lags well behind Mr Karamanlis in opinion polls.
Yet Mr Karamanlis may not be able to ignore Greek involvement in a bribery scandal at Siemens. Reinhard Siekaczec, a former executive at the German electronics giant, which supplies equipment to Greece’s state telecoms operator, gave damaging testimony at a trial in Munich earlier this year. He said that “commissions” worth 8% of the contract’s value were paid to Greek politicians and senior executives through a network of offshore companies. The total amount exceeded €1 billion, he claimed. Most of it apparently went to officials from Pasok, which held power from 1993 to 2004, but the New Democracy government elected that year approved a contract worth over €40m for security equipment for the Athens Olympics.
Nikos Zagorianos, a prosecutor investigating the Siemens affair, is shortly to go to Germany. One former Pasok official, Theodoros Tsoukatos, has admitted that he accepted €400,000 from the local Siemens boss as an election contribution in 1999, when he was a prime ministerial aide responsible for collecting political donations. Amid the furore, Kyriakos Mitsotakis, a New Democracy deputy who is the son of a former prime minister, recently paid an overlooked bill for a switchboard that was supplied to his private office by Siemens, after a copy of the invoice was printed in a Greek newspaper.
Cash-strapped voters are growing more critical of corruption in high places. After a decade of strong growth, the economy is slowing, though GDP is still expected to increase this year by 3.5%. Rising interest rates are putting pressure on incomes. Inflation is close to 5%. New taxes loom as Mr Karamanlis’s government struggles to keep the budget deficit under control.
Mr Karamanlis’s two-seat majority in parliament is too slim to allow for any mistakes. Several New Democracy backbenchers have come back from their holidays in rebellious mood. Sacrificing a few senior political leaders in the name of transparency might make more sense than having to fight an early election.
