ECONOMY

Excessive gov’t influence on bourse taints its image

The proper functioning of the stock market is facing two big dangers: The first is attempts to paint it with the stigma of a lack of credibility, to present it as a place only for wheeler-dealers; the second – related to the first – is the political exploitation of the movements of the general index. Bourses in many countries have risen and fallen, like ours, over the last four years but rarely has any relation with the stock market been regarded as suspect. The prime minister’s recent directive that deputies of the ruling party must submit declarations of personal dealings in the bourse smacks precisely of such a mentality of suspicion. It is true that bourses are not places where angels thrive. But we are now in danger of being led to the other extreme. Who would have expected that banning politicians from stock market trading would come to be regarded as a sign of political health, as if unethical politics was mainly conducted and funneled through the bourse? A reasonable inference of the prime minister’s directive is that deputies will ultimately have to prove where they got any money they invested in the stock market. This mentality must immediately be reversed; there is no developed country without a developed bourse. The problem does not arise from the public image of politicians in general, nor from the way the bourse functions. The real problem is that the Athens Stock Exchange (ASE) is dominated by shares controlled by the government. The partial flotation of public enterprises on the bourse, instead of real privatization, is causing side effects. The greatest developments that could move the market in one direction or another depend mainly on government options. For this reason, many consider certain the involvement of government insiders who, as a whole, are considered suspect of getting rich quickly. Moreover, there is the impression, sometimes justifiably, that the government is using a bull market to win voters’ favor. But politicizing developments on the bourse transforms it into a belt for conveying political options to society and an additional arena of political conflict. However, its role is none other than to channel resources into the economy, a place for long-term investors and day-traders alike, angels and devils together. Besides, it is not at all certain that voters’ preferences are formed depending on the performance of the general index. This is perhaps yet another myth that harms both politics and the economy.