Syriza Strains Greece’s Credibility

The country’s hard-left government continues to put politics before reform.

The Wall Street Journal

By YANNIS PALAIOLOGOS
Sept. 7, 2016 3:23 p.m. ET

Independent institutions remain anathema to the government in Greece. Two cases that have dominated the headlines in recent weeks demonstrate how the country’s populist government, led by the hard-left Syriza party, continues to put politics before reform and refuses to learn the right lessons from the country’s recent past.
The criminal case against economist Andreas Georgiou returned to the spotlight last month when it was reopened by the country’s Supreme Court. A longtime official with the International Monetary Fund, Mr. Georgiou had been appointed six years ago to head the independent Hellenistic Statistical Authority, or Elstat. The prime minister at the time, George Papandreou, created Elstat as a response to the discovery that the government under his predecessor, Costas Karamanlis, had underreported the country’s fiscal deficit.



After an exhaustive review, Mr. Georgiou revised the 2009 deficit figure upward to 15.4% of gross domestic product from 13.6%. Elstat’s European Union counterpart, Eurostat, fully accepted the result, as it did all subsequent figures produced by Elstat during Mr. Georgiou’s five-year term. The age-old practice of putting asterisks of doubt next to Greece’s budget numbers ceased after 2010.

But when one of Mr. Georgiou’s underlings accused him in 2011 of artificially inflating the deficit to help creditors impose draconian austerity measures on Greece, a certain Greek worldview was aroused. It was a charge tailor-made for those who believed the bailouts had been the cause of Greece’s economic troubles, and not the other way around. Prosecutors who had been remarkably lax about investigating statistical skullduggery prior to 2010 jumped at the case, never mind that Mr. Georgiou was appointed a full three months after Greece’s bailout had been signed.

Despite having been cleared repeatedly due to a lack of evidence of any illegal activity, Mr. Georgiou is now being charged with a felony, which carries a maximum sentence of 10 years in jail.

Both partners in the governing coalition, Syriza and the Independent Greeks, seemed happy at first to see Mr. Georgiou’s prosecution proceed. The case places the blame for Greece’s economic pains on foreign creditors, and it has the added bonus of dividing New Democracy, the official opposition party.

New Democracy’s current leader, Kyriakos Mitsotakis, has spoken out against the statist, clientalist policies of the precrisis years and their critical role in leading Greece into the arms of its official lenders, the European Central Bank, the European Commission and the International Monetary Fund. But he can ill-afford to alienate Mr. Karamanlis, the former prime minister, and Mr. Karamanlis’s many supporters within the party. Blaming Mr. Georgiou is a convenient way to exonerate the former prime minister for his huge responsibility in the country’s fiscal collapse.

The Greek government has sounded more supportive of Elstat in the past few days, but only because of the strong reaction by the European Commission, both publicly and behind closed doors, against the renewed persecution of Mr. Georgiou. Athens’s natural instinct remains to turn statistics into a scapegoat for the corrupt government practices that led to fiscal disaster.

If Greece’s government seems keen to bury the country’s precrisis sins in a story of statistical malfeasance, it is determined to elevate the regulation of the national broadcasting sector into a purge of the “triangle of corruption” linking politicians, media barons and bankers.

It is true that there has been no public tender on broadcast licenses since the beginning of private television in Greece in 1989, and that TV networks have historically benefitted from cozy relationships with banks and political parties. Some media owners have used their influence to strengthen their other business interests, which often involved government contracts. And they could always rely on the help of politically controlled banks to keep funding their networks, even when they were making losses.

Syriza’s proposed remedy, however, only makes matters worse. In a move of questionable constitutionality, Nikos Pappas, the minister of state and Prime Minister Alexis Tsipras’s closest confidant, has chosen to bypass the country’s electronic-media watchdog and has taken it upon himself to oversee the tender process.

Mr. Pappas is reducing the number of private-channel licenses to four, down from the existing seven. His original justification was that the country’s digital spectrum would otherwise be overloaded. After that argument was demolished, Mr. Pappas switched to blaming the collapsing advertising market for the reduction, claiming that there wasn’t enough advertising money to support more channels.

If that were true, presumably the market could have determined this for itself, and nonviable channels would have shut down in due course out of financial difficulty. Meanwhile, awarding more licenses would have brought more desperately needed revenue into the government’s coffers. But the thought doesn’t seem to have occurred to Mr. Pappas.

The minister also seems similarly unconcerned about the possibility of shutting down existing TV stations with hundreds of employees. Meanwhile, the prospective new station owners come with baggage of their own, be it serious legal entanglements or other businesses heavily dependent on government contracts, making a mockery of the claim that the auction was about combating corruption.

The EU took a forceful stand opposing the case against Mr. Georgiou. The restriction of freedom of expression involved in the attempt to reshape the TV landscape is a serious challenge to European values. European authorities, including the Court, if it comes to that, should treat it accordingly.

Mr. Palaiologos is a journalist at the Kathimerini newspaper in Athens. The second edition of his book “The Thirteenth Labour of Hercules” was published in July (Portobello Books).