ECONOMY

In PASOK’s wrong steps

Former Economy and Finance Minister Nikos Christodoulakis must be feeling quite happy seeing his successors borrowing «in secret» to cover the black holes of debts left behind by his PASOK government. Between March 7, the date of the election, and May 10, 2004, the Greek government borrowed 6 billion euros, with no word being heard about it. Indeed, 3.35 billion of this sum is in short-term loans with high variable rates, reminiscent of the difficult years of the early 1990s. This huge sum brings the total public borrowing since the beginning of the year to 30 billion euros, against a target of 32 billion for the entire year, set by the previous government and, for this reason, probably false and unreliable. But, either from lack of experience or ignorance, the present government has appeared willing to emulate the tactics of its predecessor; that is relying on intransparency, misleading tactics and distortion. The most pertinent question arising is why the responsible deputy finance minister, Petros Doukas, who signed the loan contracts during the period in question, took more than 60 days to make the relevant details public. The revelations were made last Thursday, after some minced words by Christodoulakis’s successor, Giorgos Alogoskoufis. After press reports of loans totaling 5 billion euros on the same day, Doukas indicated he would provide details but began on the wrong footing; that is, intending to mislead. Initially, he attempted to issue a press briefing announcing just two loans, of 2 billion euros each and a 30-year duration. By luck, he learned that others knew that there were more than two loans. And so he was forced to reveal more than he intended to up to that point. The press briefing referred to two short-term loans of five and seven years respectively, and at variable rates, which are more usual for the countries of central Africa. The commissions that the banks paid in order to get the business remain unknown – just as in Christodoulakis’s days. And just like in those days, the huge commissions involved seem charming enough to keep those in the know from talking… To be sure, Doukas has twice before appeared to be moving outside the guidelines set by Prime Minister Costas Karamanlis. Not so long ago, he appointed Giorgos Katsaounis as vice president of the public armaments and munitions conglomerate, EBO-PYRKAL, who was sent off quickly by a personal intervention of the prime minister. The reason – reported and not denied – was that Katsaounis had served in the group of armaments middleman Thomas Liakounakos. Another serious misstep was Doukas’s effort to appoint a head of the Public Real Estate Company (KED) by bypassing the legal requirement for a competitive procedure. The attempt was stopped in its tracks by Parliament Speaker Anna Psarouda-Benaki, who asked Doukas to return after polishing up his act. The irony in the borrowing affair is that Doukas continues to be advised by the same public agency as Christodoulakis was, the Public Debt Management Organization, a costly concern used by the previous government to falsify public debt data through very expensive swap transaction. Could a lack of experience be the reason why Doukas’s press briefing on the loans contained no word about the real reasons that led the government to borrow? The primary reason, of course, is the legacy of his predecessors. Instead, Doukas cited some barely tenable, Christodoulakis-style «excuses;» that a Greek government obtained for the first time a 30-year loan at a very attractive rate, which would also enable it to create a reserve from which to comfortably fund future requirements. The climax of the affair was that Christodoulakis issued a statement on the following day, criticizing the high level of borrowing; the No. 1 culprit of the miserable state of the Greek economy must be happy seeing some in the new government defending his work, at a time when he is rejected by others in his own party. Incumbent ministers have shown many instances of lack of communication in taxation matters; the responsible deputy minister, Adam Regouzas, has frequently made announcements on the radio, only to be refuted by Alogoskoufis within a few hours. Further, one cannot help but note instances of confusing opaqueness with transparency, and serving friends with the public interest.