When the Greek economy began to publicly collapse in 2009, it started to drown in a depression the likes of which many could not handle. Instead, the European Union and the International Monetary Fund stepped in with the largest bailout in the history of global economics. Greece got a second chance for a price of 240 billion euros. Many expected this to mark an end to illicit financial practices in Greece, however, in the past decade, corruption has managed to stay alive and well in a country with a new lease on life. These are 10 facts about corruption in Greece to help better understand what is happening and why.
10 Facts About Corruption in Greece
The Price One Pays for a Civilized Society: Oliver Wendell Holmes was an American Supreme Court Justice and not an expert on the Greek economy, however, his definition of taxes shall be important in these 10 facts about Greek corruption. It expresses the importance of paying taxes to maintain a civilized society. Tax fraud is rampant in Greece. When millions of citizens lie about their income to get away with spending next to nothing on taxes and large corporations do the same (albeit on a larger scale), the tax burden often shifts to the middle class. When life in the middle class becomes unaffordable, poverty grows and the problem seems increasingly unsolvable, eroding the public’s trust in its own institutions. Former U.N. special rapporteur on extreme poverty, Magdalena Carmona, stated that “Tax fraud perpetuates income inequality. A government that does not do everything it can to fight tax fraud is a government that is not doing everything it can for economic equality.”
Crime and Lack of Punishment: Millions of Greeks take no issue with lying about their income due to the fact that there are little to no consequences for it. Greek citizens and officials expect their names to disappear in a void of red tape and missing files, and it works more often than not. However, despite the general sentiment that corrupt officials can get away with their crimes, former Prime Minister Antonis Samaras, leader of the New Democracy Party, began actively pursuing financial corruption in his government. Perhaps the most notable of his achievements was the arrest of former defense minister Akis Tsochatzopoulos. Prosecutors had reportedly given him a 20-year prison sentence after they determined that he might have stolen close to a billion euros from defense contracts.
Fakelakia: Corruption thrives in places that have normalized it. Generally, bribes in Greece happen through small envelopes stuffed with cash to expedite services from household utility maintenance to hospital care. The practice is so common that fakelakia, meaning little envelopes in Greek, has become shorthand for bribes. Anyone can do it in Greece, from high-level officials to everyday citizens. In an effort to combat this, a young woman named Kristina Tremonti started an anonymous whistleblower website in 2012 for people to call out corruption without risking persecution. According to Tremonti, “names are not revealed for the whistleblower’s protection. Once a significant number of complaints have been lodged against a particular clinic or doctor the authorities are promptly notified.”
Justice is for Sale: It is not just everyday Greek citizens who have become all too familiar with bribery. According to the Council of Europe’s anti-corruption group, the Greek judicial system needs more clearly defined rules concerning professional conduct and integrity for judges and prosecutors in the judicial system. As the system is now, it does not resolve corporate regulation cases in an efficient manner. When it does, “over a third of companies perceive the independence of courts as fairly or very bad.” In addition, almost half of all Greek citizens believe corruption to be a common practice in Greek courts.
Corruption is Classic: While overhauling a nation’s government to root out corruption is certainly a victory, as Samaras began doing in 2014, the process can be a bit messier than most people might want to deal with. When a corrupt system is the only system with which people are familiar and it goes away, the immediate aftermath is a nation of citizens who do not know what to do next or how they should do it. Older generations suffer frustration that they can no longer fully utilize a system they have known all their lives. A Greek senior citizen reported to the Guardian that, “Nothing gets done anymore because it’s so much more difficult to bribe civil servants… Now nothing works.”
Expectance of Failure Can Ensure Failure: The desire to hold on to as much money as possible is not the sole motivation for the tax fraud crisis in Greece, it is also about withholding that tax money so that a government the people perceive as untrustworthy cannot spend it. Without public funds to spend on health care, social security and school systems, all public services suffer as a result, thus reinforcing the public’s belief that the government doesn’t have what it takes to help them. In the early years after the financial crisis, under-the-table payments to doctors and clinics totaled 300 million euros or $334,949,950.66 U.S. Greece has made some progress in recent years, though, and now dental and health care costs have reduced by half.
Many are Guilty of Corruption: Tax dodgers or corporations are not the only offenders of bribery in Greece. Corruption is so widespread in Greece that even rehab networks and humanitarian organizations have a history of doing things under the table for the sake of efficiency. The former president of Kethea, the largest rehab network in Greece, even went on the record saying, “Even agencies like Okana, dealing with the very sensitive issue of drug addiction, have been found to have abused funds on a massive scale.”
For the Record, There is not Always a Record: When people do not include economic activities in national records to avoid paying indirect taxes to the proper authorities, they are part of a country’s shadow economy. Obviously, funds that go into a shadow economy are nearly impossible to track, but the majority of funds in the shadow economy are the result of undeclared employment. Getting payment under the table means fewer taxes for everyone involved. The issue may not seem too pressing, however “various studies have calculated that the shadow economy makes up between 20 to 30 percent of GDP [in Greece], an unusually high percentage for a developed country.” To put that into solid numbers, the shadow economy took up 22.4 percent of the total economy in 2015. That means 40 billion euros went unaccounted for that year.
Holding Greece’s Corruption Accountable: Through these are 10 facts about corruption in Greece, financial and political corruption are prevalent all over the world. That is why a bipartisan bill sponsored by Senators Ben Cardin (D-MD) and Sen. Todd Young (R-IN) called The Combating Global Corruption Act proposes requiring the U.S. State Department to rank countries on a three-tier system. Countries compliant with anti-corruption regulations would rank as a first-tier country whereas countries like Greece with a history of apathy towards rooting out corruption would rank as a third-tier country. This bill would let U.S. officials put money into anti-corruption policies with seized resources. Essentially, those who helped perpetuate global poverty would have to pay to clean up their own mess.
Ninety Years of Financial Instability and Still Going Strong: Greece gained independence from the Ottoman Empire in 1830. The Greece that the world knows today is almost two centuries old and for 90 years of that time, it was either in the middle of restructuring debt or in default.
Despite Greece’s challenges with corruption, it is slowly moving in the right direction through Kristina Tremonti’s whistleblower website, government efforts and the reduction of costs for health care services. With the implementation of The Combating Global Corruption Act in the U.S. and Greece’s internal efforts to reduce corruption, these 10 facts about corruption in Greece may disappear into the past.
– Nicholas Smith
Read more: borgenproject.org