Unaccountability: Who’s responsible?

In 1987 under the PASOK administration, inspections of market prices had just been abolished and a new trade minister, Takis Roumeliotis, had only one weapon at his disposal – the price lists businesses were obliged to submit before raising the prices on their products. It was then that a powerful businessman raised yogurt prices by 10 percent. A few days later, Roumeliotis called him and asked him to cancel the hikes as the ministry’s services had found them to be unjustified. The manufacturer refused and continued to sell at the higher prices. When the minister called him back and warned that he would be sending in health inspectors every day as of the next day to inspect his factory, and that if even one hair was found, the factory would be closed down, the all-powerful businessman canceled the price rise the next day. If Roumeliotis could do it, why can’t the current responsible minister, Development Minister Christos Folias? After all, the people re-elected the Karamanlis government with a majority. After all, this is precisely what is at the heart of the government’s problems in the economy, health and education sectors, among other things. Although elected by the people, although it has their support to go ahead with changes and reforms, it is fearful and spineless in the face of strongmen, whether they are «pimps,» businessmen or unionists (of employers or employees), such as the truckers. Folias has announced 41 measures to fight the high cost of living but forgot the most important, the imposition of stiff penalties on cartels and monopolies controlling the market. Even with the recent dramatic revelation that a major industry had been importing carcinogenic sunflower oil and using it without carrying out any prior quality inspections despite its ultra-modern installations, the ministry imposed no fine. Why not? The only explanation is that it does not dare go up against the Elais firm or its multinational owner, Unilever, which controls everything on the market from oil to detergents. It is unreasonable for Prime Minister Costas Karamanlis, PASOK President George Papandreou or Economy Minister Giorgos Alogoskoufis to go to the general assembly of the Federation of Greek Industries (SEV) and ask the industrialists, in the name of social responsibility, to avoid oligopolist practices, and then have the former head of the milk cartel (Dimitris Daskalopoulos) who was re-elected to the head of SEV, reply arrogantly that the state has to put its own house in order before trying to teach businessmen any lessons. Maybe Daskalopoulos was right and the responsibility for the unaccountability in the market is the state’s fault. Papandreou, who gave a speech at the SEV assembly, said: «A small amount of inflation, no doubt, is due to the international rise in prices of fuel and primary materials, but the rest is due to the inherent problems in the Greek market and the absence of serious state institutions of inspection, either on profiteering or the oligopolies in the market. The distorted market for products and services, controlled by cartels, and the government’s inability to intervene with any serious structural changes or deregulate the market in the Greek economy, produce unreasonable differences between similar products sold by the same multinationals in Greece and other countries in the eurozone.» Papandreou isn’t the only one saying that. It has also been noted in reports by the European Commission, the Organization of Economic Cooperation and Development (OECD) and the International Monetary Fund (IMF), let alone by this newspaper. So why has the New Democracy government not made the structural reforms (for example, if it had deregulated the closed professions, it would not have been held hostage for a week by all of Greece’s truck drivers)? Fear of clashing with vested interests is only one part of the answer. The other is that the country’s political system, whether PASOK which governed for 20 years or New Democracy, which first attacks «pimps» and then makes them stronger by assigning them public works, does not institute stable and transparent regulations for business activity for the simple reason that it wants to maintain the client state and transactions between politicians and business interests. Papandreou also said something else. «A client state does not have rules, regulations and principles in its transactions with the private sector and business interests, it has client relations that not only have a negative effect on the way the state functions, but on the health of the market. It eventually creates insecurity for business owners who do not feel that they are operating within a framework of values and rules but at will, according to whoever happens to be minister, whatever side of bed he gets up on, and which civil servant he will be transacting with.» The country needs clear rules to govern the market in order to deal with the problems in the economy. Without those, any exhortations to businessmen go in one ear and out the other. And that is a pity for a leader like Karamanlis.