Bill introduces new rules for funding of Greek political parties

Legislation submitted to Parliament Thursday seeks to overhaul the way political parties in Greece are funded by limiting the amount of taxpayers’ money they receive, increasing transparency regarding donations and preventing them from borrowing against future revenue.

One of the most significant changes that the draft law aims to introduce is for parliamentary parties, which have access to state funding, to receive taxpayers’ money based on a 0.005 percent share of net revenues from the previous year rather than 0.102 percent state revenue projected in the national budget. Until now, parties had received public funding based on expected revenues, which often fell short of the target, leaving the political groupings better off than the state.

In terms of state funding per vote gained, Greek parties have one of the highest ratios in the European Union. This has led parties to be highly reliant on the public money they receive each year. They are due to receive a combined total of 10 million euros this year, with New Democracy getting the largest share (820,386 euros) as it won the last general elections.

The bill also prevents parties from obtaining bank loans by using future state funding as collateral. This had been a popular tactic for parties until now and has led to New Democracy and PASOK owing around 250 million euros to local banks.

All parties will be required to have a maximum of three bank accounts, whose details must be registered with a committee that will monitor party finances. If extra accounts are discovered, their contents will be seized.

All donations must be made to these accounts and the details of the donors must be made public, according to the would-be law. The maximum donation that can be made in the course of a year will be 20,000 euros. Donations from abroad will not be permitted.

The draft law adopts most, although not all, of the 16 recommendations regarding changes to party funding made by The Group of States against Corruption (GRECO), a body set up by the Council of Europe.

Due to the nature of the legislation tabled in Parliament Thursday the debate on its provisions will not be held until the summer recess is over. The House is due to return to normal sessions in October.