PASOK dispute over party finances puts PM on alert

Although buoyed by the completion of its first major privatization on Wednesday, the government was concerned that a spat between PASOK leader Evangelos Venizelos and his predecessor, George Papandreou, would threaten the coalition’s unity.

The two men met on Tuesday to discuss the party’s finances after reports that accountants assigned by Venizelos had discovered numerous financial discrepancies that occurred during the period Papandreou held PASOK’s presidency. Kathimerini understands that both men contacted Prime Minister Antonis Samaras’s aides to assure them that the issue would not affect the government.

However, sources close to the premier believe that the PASOK dispute could have a knock-on effect as it might trigger Socialists who are skeptical about the party’s involvement in the coalition to start speaking their minds publicly. Also, they expect that a prolonged debate about party funding will also force New Democracy to respond as it is also heavily in debt, like PASOK.

Kathimerini understands that this is likely to spur Samaras into taking the initiative on the issue of party funding, which could mean the announcement of measures to impose stricter checks on political parties. Samaras has long been in favor of anyone who has held a key public position since 1974 facing thorough inspections of their finances.

The meeting between Venizelos and Papandreou lasted for about 50 minutes on Tuesday and is said to have been a stormy affair. Papandreou essentially accused Venizelos of trying to tarnish his reputation by spreading rumors about discrepancies in the party’s finances. Venizelos urged the former prime minister to read the results of the audit that was carried out. Papandreou refused to take a copy of the report with him when he left, sources said.

Venizelos appointed five accounting firms to audit the party, whose debt stands at 114 million euros. PASOK allegedly borrowed 116.5 million euros between 2003 and 2011. Papandreou led the party from 2004 until last year.

The ex-prime minister insisted that the party’s debt is a result of longstanding obligations rather than any mismanagement during his leadership.