Based on their vote tally, parties get taxpayer money but don’t have to account for how it is spent and can use it as collateral to get bank loans.
The former ruling New Democracy Conservatives and its then-partner the PASOK Socialists, owe close to 250 million euros ($301.08 million) in bad loans which are struggling to be repaid but reportedly aren’t being chased as the bank officers who approved the money got immunity.
Despite that, the parties have said they are having trouble paying their staff and headquarter expenses and the method of party funding has drawn criticism from independent agencies, including Leandros Rakintzis, a former Supreme Court judge who was Inspector-General for 11 years before his term ran out in 2016.
He told Reuters in 2012 that the party financing system was flawed and improperly commingled with other big interests. “This is all about the exchange of favors,” he said. “These parties cannot pay the debt so it’s a vicious circle in which they come to depend on the banks. It creates an interdependence of politicians and banks.”
Like many European countries, Greece provides some public funding for political parties and their election campaigns. Each year parties receive tax-free funding equal to 0.102 percent of annual state revenue, plus another 0.01 percent for “research and education” purposes. When national or European parliamentary elections take place an extra 0.022 percent of annual state revenue is handed out.
Private companies, owners of media and foreign nationals are banned from funding parties. Individuals giving more than 600 euros ($736.87) have to be identified and are allowed to give only up to 15,000 euros ($18,422) a year, though it is unclear how well these rules are enforced.
Most of the funding, 80 percent, is divided between parties that win seats in Parliament, each one receiving amounts proportional to the votes they score, leaving marginal parties with what’s left.
One of the two reports which deals with corruption prevention with lawmakers, judges and prosecutors said that only six of 19 previous recommendations have been “dealt with in a satisfactory manner,” but lauded a code of conduct for Members of Parliament.
That deals with rules relating to conflict of interest and gifts, among others, and includes a supervision and enforcement mechanism by a parliamentary ethics committee and with a range of possible sanctions.
GRECO also commended increased transparency and a broadened scope for declaration of wealth assets, income and interests, which would remain online until three years after the end an MP leaves office.
The group took another look at Greece’s compliance with a specific recommendation on the transparency of party financing, concerned there was a “clear reversal” over anonymous contributions to political parties.
That previous recommendation had permitted coupon-based donations only if they systematically indicated names and tax identification numbers or identity card numbers of donors.
The ruling Radical Left SYRIZA has removed a ban on anonymous donations, backpedaling on transparency pledges and now lets some anonymity go along with giving money to political parties, especially in fund-raising methods.
“From the outset, GRECO notes that the approach followed in Greece, with multiple, often divergent legal changes within short periods of time, creates an unpredictable legal framework which may result in ineffective implementation and a substantial lack of transparency,” the report states. “Moreover, fund-raising events can add another layer of unidentified donations for a total amount which is even higher than that permitted for anonymous coupons.”
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