Damian Mac Con Uladh

Greece’s heavily indebted coalition parties move to ringfence state funding from seizure

In Greece on 16 October 2014 at 10:29 am
The maths. 2013: New Democracy +Pasok = €270m

Debt to democracy: “2013: New Democracy +Pasok = €270m” (Screengrab from a video on party debt produced by the Drasi party)

Coalition parties New Democracy and Pasok, which combined owe over €270m to the country’s banks, on Wednesday successfully tabled an amendment that will ringfence 40% of state funding to political parties from seizure.

In a last-minute intervention, the heavily indebted parties introduced the amendment to a draft bill on political funding on the grounds that it was to safeguard the “minimum guaranteed revenue for and the sustainability of parties”.

The opposition voted against the amendment, arguing that it was specifically tailored to serve the needs of the heavily indebted coalition parties. However, none of the opposition parties called for a roll-call vote on the amendment.

In recent years, Pasok’s and New Democracy’s debts have left both parties struggling to pay their employees’ wages and social insurance, rent and other bills. Given its plummeting political fortunes in recent years, Pasok by far faces the greatest problems as its state financing has decreased accordingly.

The move by the ruling parties to protect a significant portion of state funding from possible seizure is being widely viewed within the context of the strong possibility of snap elections between now and spring.

For ordinary debtors to the state, the maximum amount on the savings they may protect from confiscation by the tax authorities is €1,500, regardless of the size of the debt.

The interior minister, New Democracy’s Argyris Dinopoulos, also backtracked on banning parties from accepting anonymous donations. According to amendments he has accepted, political parties will be allowed to collect €150,000 in total from anonymous donors using special fundraising coupons.

In 2010, the Council of Europe’s anti-corruption monitoring body, the Group of States Against Corruption (Greco), called on Greece to abolish anonymous donations for political funding purposes (pdf).

A vote on the bill is expected to take place on Thursday.

A few months before the 2012 elections, Pasok and New Democracy tried to insert a rider provision on political party debt to a bill on regulating livestock breeding.

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