In A Mess Of Corruption & Neoliberal Austerity, Syriza Sells Greece Out To The Highest Bidders
ATHENS — (Analysis) Stories of human suffering continue to multiply in present-day Greece, which is loosely governed by the “first time left” government of Syriza and more directly by the European institutions and the International Monetary Fund.
In the city of Patra, an elderly woman whose only source of income is her severely battered pension, from which she supports her two grandchildren, had her electricity service cut in the presence of a police SWAT team, despite her reliance on an oxygen concentrator to live. Her son was arrested for protesting the action and brought before a prosecutor.
Police in the city of Katerini, implementing the government’s crusade against purported “tax evaders” to the letter, arrested a father of three, whose spouse is unemployed, for selling pastries on the street without a license, fining him €5,000 ($5,627) for the infraction. The man is well-known in his community for donating his unsold pastries to local children and a local home for seniors at the end of each day.
I’ve also heard the story of an impoverished cancer patient in Thessaloniki, who, according to the eyes of the law, was another one of those lazy, corrupt Greeks guilty of dipping their hands too deeply into the public trough. Her meal card which allowed her to eat at a local soup kitchen was revoked, simply because she was concurrently receiving state aid for being a cancer patient.
On the island of Samos, a short distance from the Turkish coast, uniformed German police freely patrol the streets of the main town, Vathi, purportedly on the lookout for refugees, while German coast guard boats sit docked in the harbor. A few kilometers away, in the mountain village of Manolates, residents and shopkeepers listen to Turkish music on the radio—as no reception of Greek broadcasters was possible.
Finally, in my own neighborhood in Athens, 17 out of 22 storefronts lie vacant in a three-block stretch, “for rent” signs fading slowly from view. A once-beautiful park and playground lies vacant, entrances chained shut, while overgrown weeds cover this former piece of urban green space.
None of these stories are likely to make it into Prime Minister Alexis Tsipras’ forthcoming state of the union speech at the Thessaloniki Trade Fair. The prime minister is much more likely to tell us that unemployment has purportedly decreased, that Greece has emerged from recession (just as it supposedly did in 2014), that industrial production has dramatically increased, that the country is returning to economic growth, and that it is pursuing closer defense and military ties with the United States and NATO.
Syriza-led Greek state strips itself of sovereignty
Reality, however, is much more grim. In May, without parliamentary debate, the Syriza-led government passed a 7,500 page omnibus bill that transferred control over Greece’s public assets to a fund controlled by the European Stability Mechanism for the next 99 years.
These assets include airports, harbors, public beaches and coastline, and natural resources.
Earlier this year, 14 profitable regional airports were sold to the German publicly-owned corporation Fraport, while a majority stake in the port of Piraeus, one of the largest ports in Europe, was sold to Chinese-owned Cosco for €365 million—equal to 15 days’ worth of debt repayments—while its facilities alone are valued at more than €5 billion. The national railway, TRAINOSE, including all infrastructure and trains, was sold to Italy’s Ferrovie Dello Stato Italiane for a mere €45 million, with the company’s debt was written off as part of the sale. The site of the former international airport of Athens, once slated to become Europe’s largest urban park, was sold to a consortium of investors from Greece, China, and the United Arab Emirates, led by the Latsis family of Greek shipping tycoons, who plan to construct luxury resorts and shopping malls on the site.
In May, Syriza’s cabinet presented plans to sell a 49-percent stake in the water utilities of Athens and Thessaloniki, plus 18 additional privatizations instead of the nine initially agreed to with creditors in the third memorandum. Prior to being elected in January 2015, Syriza promised to put an end to the privatization of public assets, and it vowed not to privatize water in its September 2015 platform.
Nevertheless, the Syriza government has committed to completing the privatization of numerous key assets, including the natural gas utility and the state’s stake in Athens’ Eleftherios Venizelos international airport, by November.
Also as part of the omnibus bill, the Greek parliament rendered itself voteless, as the legislation annuls the role of parliament to create a national budget or pass tax legislation. In earlier legislation, the government had agreed to submit all pending bills to the group of lenders known as the “troika” (European Commission, European Central Bank, and the IMF) for approval, reminiscent of the German Reichstag’s willful relinquishment of legislative power to then-Chancellor Adolf Hitler in 1933.
Taxes skyrocket and Greeks are unable to pay
Further illustrating just how much sovereignty has been stripped from the Greek state, the omnibus legislation also foresees the activation of automatic spending cuts, including salaries, without any parliamentary intervention if Greece fails to achieve targets for a primary surplus. In order to attain a primary surplus, spending has already been slashed dramatically, furthering the spiral of austerity Tsipras had once promised to end with “one law and one article.”
Instead of austerity being abolished with one law and one article, Greek citizens have a new, crippling tax avalanche to look forward to beginning this autumn. On Aug. 29, this year’s unified property tax (ENFIA) was sent out to all property owners, with seven in ten businesses facing an increase this year. This is the same tax which members of the Syriza-Independent Greeks coalition government had denounced prior to being elected, claiming it was unconstitutional, promising to repeal it once in office, and instructing citizens on how to avoid paying it.
Once Syriza and the Independent Greeks came to power, however, payment of the ENFIA was described by the government as a “patriotic duty.”
Meanwhile, the Greek government is preparing to introduce a nationwide “asset registry” for taxation purposes, in which citizens will be obliged to declare not only their incomes and real estate, but everything from jewelry to family heirlooms, and even the amount of cash in their possession. This Orwellian measure will be supplemented by a national transaction registry, where essentially every bank transaction and purchase from each citizen will be tracked. Within five years, owners of homes and commercial buildings will be required to hire civil engineers to submit detailed blueprints and videos of their structures in order obtain a “structural identification” certificate—or risk steep fines or demolition.
These new taxes and measures are set to be enforced despite the growing inability of citizens and businesses to pay. The first half of 2016 saw a €1 billion shortfall in the collection of the value-added tax, while €272 million worth of income taxes for this year—about 25 percent of total expected revenue—remains unpaid. This is not due to a purported culture of “tax evasion,” but due to declining incomes and a general inability to pay.
Evidence of citizens’ inability to pay abounds. Deposits in Greece’s shattered banking system declined by €160 million in July alone. The number of employed people not being paid has reached 1 million, and 500,000 Greeks are paid less than €412 per month for their labor.
Eurostat figures from the fourth quarter of 2015 show that just 4.3 percent of the unemployed in Greece were able to find jobs. Greek families, who once took pride in passing property down from generation to generation, leading to the highest rate of homeownership in Europe, now find themselves rejecting inheritances from deceased relatives in record numbers, due to the tremendous tax burden.
Further fueling the oncoming storm, the Syriza government has committed to sweeping home foreclosures and auctions this autumn, while confiscations of funds from ever-dwindling bank accounts for unpaid debts to the state continue unabated. The government estimates it will collect over €2 billion from these confiscations by the end of the year.
In the meantime, the omnibus bill passed in May lowered the basic pension to a paltry €345-384 per month, while the value-added tax on many basic goods, including necessities like soap, was hiked to 24 percent. Following the initial slashing of basic pensions by up to 48 percent in June, aid for poor families and the disabled has been slashed almost in half beginning with this month’s payments.
Supplementary pensions for 150,000 recipients have been cut further, by as much as 38 percent, with further reductions slated for October. In response to the cuts, Giorgos Katrougalos, the labor minister who participated in the 2011 protests of the anti-austerity “indignants,” stated that the new system will “protect all Greeks from poverty,” adding that had pensions not been reduced, they would not be issued at all. Not convinced, pensioners have already begun to protest outside government ministries.
Meanwhile, the number of households which qualify for subsidized heating oil has been cut in half, the fuel and oil tax has once again been hiked, co-payments on prescription drugs covered by public insurance funds have been raised by 25 percent, while suffering small businesses have been further burdened by an increase in their tax rate from 26 percent to 29 percent. In a recent televised interview, Syriza MP Hara Kafantari stated that “the days where a shop owner was his own boss are over.” This perhaps helps explain why Greece’s burgeoning startup scene is being driven out amid Syriza’s excessive and unpredictable taxation.
Broadcasting licensing process rife with corruption
Syriza’s recent licensing bid for national television broadcasters is emblematic of its reign in office thus far. Diaploki is a Greek word which perfectly sums up the triangle of corruption and interplay between major political and business interests and the state. One of Syriza’s numerous pre-election pledges was to rout the “oligarchs” who control the media and much of the economy and put an end to this diaploki.
On Sept. 1, the Syriza-led government triumphantly claimed to have fulfilled this promise through the completion of the auctioning process for four licenses for national “general-interest” television stations. This announcement was accompanied by claims that “fairness” and “rule of law” had been “restored” after 27 years of “lawlessness” on the Greek airwaves (broadcasters have up until now been operating under a framework of provisional legality).
In Greece, the rabbit hole of diaploki runs deep—and this has not changed in the slightest during Syriza’s reign. The bidding process was both farcical and inhuman: The bidders were said to have been locked in isolated rooms in the headquarters of the Greek Secretariat for Press and Media, without any ability to communicate with each other or with the outside world for 70 hours, purportedly to ensure a “clean” bidding process.
In reality, though, the process was rife with illegalities, contradictions, inconsistencies, and absurdities, and it completely lacked transparency. It has also put six of Greece’s eight largest private television broadcasters in danger of being forced off the airwaves by the year’s end, including the top station in the ratings, Alpha TV.
Most significantly, perhaps, is the fact that the licensing process was conducted by the government itself, instead of by Greece’s independent licensing body for broadcasters, the National Commission for Radio-Television (NCRTV), which has remained defunct for most of the past year. This contradicts both the Greek constitution and European regulations which call for licensing processes to be conducted by independent bodies. The bid was based on the false premise that there were only enough frequencies available to license four national privately-owned broadcasters—two frequencies with two HD outlets each.
Further, while the government has repeatedly hinted that licenses for national “thematic” (special-interest stations) will be issued, it has not stated when this will happen, how many licenses will be issued, or through which process.
This immediately contradicts the government’s claim that, aside from technical reasons, the number of national general-interest licenses was limited to four due to the limited size of the Greek advertising market and the purported desire to ensure economically “viable” licensees.
How could bidders gauge their viability and bid accordingly, without knowing what the future marketplace will look like?
Adding to the confusion, upon completion of the licensing process, the government announced that it is pushing back the licensing process for “thematic” stations indefinitely and intends to instead focus next on the licensing of regional broadcasters through a similar process which would put most of Greece’s 100-plus regional stations at risk of being forced off the air. Already having been battered by the economic crisis, these regional stations would be unable to afford the steep cost of participating in the bidding process.
Following this, thematic licenses may be issued on a national basis, while similar licensing procedures for radio have been forewarned.
The licensing process also does not include any criteria whatsoever for the quality of programming, for balanced news presentation, or for public service programming. The only criterion which mattered was money, and with a limited amount of licenses being issued, the cost of each license was artificially driven upward, ensuring only the deepest of deep pockets–oligarchs, in other words–could participate.
It also ensured that should this licensing process be finalized and not legally struck down, Greece might just become the first country where fewer television stations will remain on the air in the digital era, instead of more.
Once out to fight the ‘oligarchs,’ Syriza’s given them TV stations instead
Syriza has repeatedly promised to “clean up” the airwaves and end diaploki. But just who are the oligarchs who successfully bid for licenses? Two of them, Giannis Alafouzos and Theodoros Kyriakou, own incumbent broadcasters Skai TV and Antenna TV, respectively. These two stations led the vociferous “pro-yes” media brigade prior to the July 2015 referendum.
Alafouzos, a shipowner, was found to be in possession of over €50 million in undeclared funds and had his assets frozen last month, pending an investigation for tax evasion. One of Skai’s main commentators, Bambis Papadimitriou, is notorious for having suggested that the previous conservative government of New Democracy could benefit from forming a coalition with a “serious” Golden Dawn, Greece’s far-right party.
Antenna TV, like Skai, is owned by a family of shipping and oil magnates. Antenna Group’s investments span multiple industries and over a dozen countries, while the station’s founder, Minos Kyriakou, has had his share of legal troubles in the past, including a jail sentence for illegal structures constructed in the resort region of Porto Heli (this sentence was later appealed down to a fine). Antenna, like Skai, also vehemently supported the pro-austerity “yes” vote in the 2015 referendum, likening the “yes” versus “no” option to a choice between being like Europe or “becoming Zimbabwe.”
The cases of the other two licensees, neither of whom are currently in possession of a television station, are even more egregious. One of the winning bidders is Vaggelis Marinakis, a shipping mogul and football magnate, who is facing at least five criminal investigations on charges ranging from match-fixing to directing a criminal organization.
Marinakis is also said to have been involved in the case of the “Noor 1,” a ship which Greek authorities found to be transporting 2.1 tons of heroin and which may be linked to Marinakis through close associates of his. Marinakis is a city councilman in Piraeus, while his right-hand man from the Olympiacos football club, Yannis Moralis, is mayor. Together, they exert control over the municipal radio station of Piraeus, Kanali 1. On Tuesday, prosecutors in Greece recommended that Marinakis be jailed pending trial on charges of match-fixing.
But perhaps the most flagrant case of all is that of Christos Kalogritsas, a former publisher-turned-construction magnate, and his son, Ioannis-Vladimiros Kalogritsas. Christos Kalogritsas’ construction firm, Toxotis S.A., is the recipient of numerous state contracts issued by the Syriza-led government for public works projects throughout Greece.
Toxotis S.A. recently purchased Medousa, a competing construction firm. It was formerly known as Tsipras ATE and owned by Pavlos Tsipras, father of Prime Minister Alexis Tsipras.
Christos Kalogritsas and his wife are currently facing civil and criminal charges for an alleged €51 million in unpaid taxes, while employees at Toxotis S.A. have previously gone on strike over six months of unpaid wages. The Kalogritsas family also owns significant shares in Attica Bank, one of the banks which has been repeatedly recapitalized by Greek taxpayers.
It is from Attica Bank that Ioannis-Vladimiros Kalogritsas provided a letter of guarantee worth €3 million in order to participate in the television licensing bid. This letter was submitted past the deadline set by the government for participation in the bid, but was nevertheless accepted.
Additionally, Christos Kalogritsas has close ties to current defense minister, Panos Kammenos; the current minister of infrastructure, transport and networks, Christos Spirtzis (whose ministry oversees public works projects and matters pertaining to broadcast frequency allocation); and celebrity television personality Nikos Evaggelatos. Kalogritsas is also said to maintain a “brotherly” friendship with current minister of state, Nikos Pappas, who oversaw the television licensing process. He is also a primary shareholder of polling firm GPO, one of the many Greek polling firms which receives state funding and which has repeatedly produced grossly inaccurate public opinion and exit poll results.
Further adding to the web of corruption, both Marinakis and the Kalogritsas family are represented by the attorney Giannis Mantzouranis. Mantzouranis also happened to represent the Greek state in the recent television licensing process. Clearly, conflicts of interest are not a concern for Syriza. In the late 1980s, Mantzouranis had been jailed as part of the wide-ranging Koskotas money-laundering scandal.
He is also one of the attorneys of investigative journalist-turned-Syriza cheerleader Kostas Vaxevanis, who through his involvement in the HellasNet network of regional television stations, stands to be one of the beneficiaries of any bid for regional TV licenses.
Diaploki is safe with Syriza in power
While Syriza is making triumphant claims of “restoring rule of law” in the television landscape, its own party-owned radio station, Sto Kokkino, went on the air illegally in 2005 after purchasing the frequency of a radio station that went unlicensed during a 2001 bid (when, again, there were claims that there was “no room” for more stations). The station in question, NRG 105.5 FM, which is under the same ownership as Athens’ Kiss FM, had illegally returned to the airwaves.
In 2006 and 2007, Sto Kokkino was shut down by authorities for broadcasting without a license, but the New Democracy government under Prime Minister Konstantinos Karamanlis later passed a law which legalized party-owned broadcast stations, permitting them to operate without a license. Sto Kokkino was therefore “legalized.”
Meanwhile, Syriza continues to enforce a law passed by the previous conservative government which allows broadcast stations classified as “news” stations to switch classifications to “non-news,” but which does not provide the same privilege to “non-news” stations which wish to switch to news programming, thus creating a closed broadcast news marketplace. Sto Kokkino’s subsidiary stations throughout Greece violate this rule, but rather than changing the law and creating a level playing field, as Syriza is claiming to be doing now with the television licensing process, it keeps this blatantly undemocratic law as is and simply violates it for its own ends.
All of this has taken place while the NCRTV remains defunct, with no frequency table having been publicized for television stations, and with 1,000-2,000 employees in the television sector facing unemployment if their stations are forced to close. This would also create a restricted and highly centralized and controlled television market. Prime Minister Tsipras, in a recent speech celebrating the opening of a new stretch of highway (constructed by Toxotis S.A.), promised to turn over the €246 million in revenue from the licensing bid “to the poor.”
Of course, this assumes that money, which would be paid in three annual installments and only if the stations are profitable, is ever paid. Even so, EU officials have already stated that it will go toward Greece’s commitments to its lenders, not to the impoverished. They’ve also questioned the licensing process itself.
Tsipras also omitted from his speech the loss of tax receipts and insurance fund contributions from the six stations slated to shut down, and the combined €700 million in debts they owe to Greek banks, which would likely go unpaid if they go off the air and be thrust upon the shoulders of Greek taxpayers instead via yet another recapitalization.
Make no mistake: Syriza’s “efforts” are not just contained to broadcast licensing. Syriza intends to create a state-run body to allocate advertising across media outlets, retaining a 30-percent commission for the state. Earlier in the year, government spokeswoman Olga Gerovasili announced the government’s intention to “restore order to the internet,” beginning with the creation of a registry of online news outlets and blogs. Registration was mandatory for all outlets which wished to be considered for state advertising expenditures—an easy way for any government to pay its way into the hearts of media owners.
Another way is through patronage, as in the case of Giorgos Christoforidis, publisher of the (once) anti-austerity newspaper To Xoni and former candidate for parliament with the Independent Greeks. Christoforidis was appointed to a post in the government’s press office while continuing to publish To Xoni.
Is it the new left or the old right? Who can tell?
In the meantime, the Syriza-led government continues to operate with stunning arrogance and insensitivity. Proclamations are made for the “record” number of tourists visiting Greece—even while most tourist resort towns lay idle during the tourist season. In Samos, patrolled by German police, there were not many refugees in sight—nor many tourists. The vice president of the Syriza government, Giannis Dragasakis, has stated that it was a mistake for Syriza to have “demonized” the word “memorandum.”
Syriza MP Makis Balaouras recently claimed that “austerity is not in Syriza’s DNA.” Economist Rania Antonopoulou, who holds the ironic portfolio of “alternate minister for combating unemployment,” recently wrote in the Syriza-owned Avgi newspaper that “the third memorandum has strengthened Greece’s position.” Nikos Xydakis, the foreign minister, recently said that Greece has renounced much of its national sovereignty. In a “let ‘em eat cake” moment, Deputy Minister for Social Solidarity Theano Fotiou remarked that “stuffed peppers could feed an entire family.” The start of the football season has been postponed, purportedly to stamp out corruption stemming from the same “oligarchs” who received television licenses.
Defense Minister Panos Kammenos has proposed the construction of a NATO base in the southern Aegean island of Karpathos, while German-owned Fraport is preparing to install a new €13 per passenger tax at the regional airports it now controls. Over the summer, the government proudly proclaimed the “loosening” of stifling capital controls—as the restriction on bank withdrawals was changed from a €420 weekly limit, to an €840 cap every two weeks. Do the math. Schools go without janitorial staffs, university restrooms without toilet paper.
All of this while there is nary a thought of departing the eurozone or following the example of British voters and waving goodbye to the EU. The signs were there about Syriza, its neoliberal tendencies, and the ensuing betrayal of its pre-election promises. Some warned about Syriza again, and again, and again, but those warnings fell on deaf ears.
Most of the world celebrated Syriza’s victory in January 2015, while “leftist” media outlets and commentators ranging from Democracy Now! to Noam Chomsky, Naomi Klein, and others, have long forgotten about Greece or have excused away Syriza’s betrayal as simply the result of being “bullied” and “blackmailed” by the EU—which Greece must nevertheless remain a part of at “all costs.”
In this modern-day debt colony the “leftist” government has demonstrated an astonishing arrogance in not only violating its pre-election promises and July 2015 referendum result, and agreeing to a third—and the most onerous to date—austerity program, but also continuing to pretend that it is acting in a “leftist” and “progressive” manner.
All the while, it’s keeping Greece firmly shackled to the chains of the EU, eurozone, and IMF, while the Greek people seemingly have lost their pluck, devoid of any fight, resigned to their EU shackles.
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