The Syriza-led government caused a stir in Greece last month when it made Leonidas Bobolas, a prominent businessman, pay €1.8m in back taxes to avoid being formally charged with tax evasion. Mr Bobolas is the chief executive of Ellaktor, the country’
The Syriza-led government caused a stir in Greece last month when it made Leonidas Bobolas, a prominent businessman, pay €1.8m in back taxes to avoid being formally charged with tax evasion.
Mr Bobolas is the chief executive of Ellaktor, the country’s leading construction company, and his family is among the most powerful operators in the media sector. People like him have long been considered by the average Greek to be beyond the reach of the tax authorities, so his arrest became the talk of Athens . But there are reasons to doubt this blow for justice is the start of a successful campaign against the clientelism at the heart of the Greek malaise.
A succession of leaders, especially since 2009, has rightly indicted the ruinous effect of the clientelist mentality on the nation’s public finances and its competitiveness — but they were only paying lip service to the need for reform. There was little will to tackle the structures of favouritism on which the political system and its clients thrived.
Voters hoped Syriza — new to governing and so comparatively free of corrupt entanglements — would be more likely to cut the ties binding politics to rent-seeking special interests. This was always a false hope, as the leftwing government’s underwhelming record shows. Syriza cannot be the battering ram that crushes the ramparts of clientelism for the simple reason that it refuses to recognise vital aspects of it. For Prime Minister Alexis Tsipras, the problem lies exclusively in the collusion (or diaploki ) between the old governing parties and powerful families with significant media holdings. Their networks were chiefly tools to influence politics in order to entrench their position in other sectors, in particular construction and energy.
But the clientelist state is not confined to dark ties with “oligarchs”. Greece’s economy was laid low because its civil service operated in the interests of its trade unions instead of society at large, and because of its deep-rooted antipathy to competition. Anti-competitive regulations and barriers to entry did not favour just a few fat cats with famous surnames; they spread throughout the economy and benefited countless nameless insiders, from truck drivers to pharmacists and lawyers. Chaotic legal frameworks created fertile ground for crooked officials to extort bribes from businesspeople seeking to expedite the issuing of permits, or to avoid fines. Universities catered to the demands of the youth wings of political parties, at the expense of quality and the free flow of ideas. Those lucky enough to be employed in heavily unionised sectors, such as state utilities or banks, enjoyed better pay, greater (or in some cases total) job security and higher pensions with fewer years of contributions.
Since the fiscal collapse the cost of adjustment, counted in jobs lost and swingeing pension cuts, has fallen heavily on private-sector workers and pensioners. Politicians passed laws to deregulate closed professions and to integrate social security funds but more often than not — as with regulations on the highly inefficient trucking industry — these were watered down.
There is little sign this is about to change. Diaploki in the wider sense remains an important part of the sad story of Greece. The perception, in particular, that some citizens are more equal than others continues to erode the fabric of trust in Greek society. Syriza has shown no interest in letting meritocracy and the market replace patronage and preferential treatment. Indeed, in many areas it is repealing anti-clientelist policies passed in the past few years. This decisively undermines its claims to represent a new beginning for Greece, and points to grey days ahead for the country’s flailing economy.
Article by Yannis Palaiologos in Financial Times
