ATHENS – Hoping to restore credibility in government, Prime Minister Antonis Samaras has proposed legislation requiring political parties to account for how they spend public money, but didn’t mention 250 million euros in unpaid loans his ruling New Democracy Conservatives and their coalition partner, the PASOK Socialists, owe banks.
The draft legislation also would reduce the amount that political parties in Parliament receive in free taxpayer money to 10 million euros ($13.76 million) a year, a level which would leave New Democracy unable to even pay the interest on loans based on its annual share of the distribution.
The newspaper Kathimerini said Samaras and Deputy Prime Minister Evangelos Venizelos, the PASOK leader have been discussing proposals aimed at restoring some trust in the political system as crucial May elections loom for Greek municipalities and the European Parliament.
New Democracy has fallen behind the major opposition Coalition of the Radical Left (SYRIZA) in polls, while PASOK has tied itself to a new political movement, Elia (Olive Tree) as its support fell to 3-5 percent, barely enough to enter Parliament if new national elections are held before 2016, when the government’s term runs out.
SYRIZA leader Alexis Tsipras, who is opposed to the terms of two bailouts from international lenders, the austerity measures that have created a crushing economic crisis, predicted the ruling parties will be repudiated and his party will come to power.
He said he will revise or renege on the conditions set by the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) in which Greece is receiving 240 billion euros ($330.46 billion) that will run out this year.
While the measures that are going to be proposed will be of a permanent nature, the government wants to publicize them before the local and European Parliament elections in May in the hope that they will also benefit New Democracy’s and PASOK’s ratings.
The proposals being considered mean that parties would be forced to keep more detailed accounts and that their finances would not be checked by Parliament but by a special committee of judges. Also, citizens’ donations to parties would not be allowed to exceed 50,000 euros and, regardless of the amount, would have to be made public.
Any legislation would also contain provisions to reduce state funding for parties that have MPs elected to Parliament. A number of reductions over the last few years led to the total amount parliamentary parties receive dropping to 20 million euros last year. The government is thinking about halving this.
A bill containing these proposals is due to be submitted to Parliament in June.
Samaras made the move after an embarrassing revelation that his party isn’t paying off loans to banks which are receiving 41 billion euros ($56.45 billion) in recapitalization funds.
Last month, thepro-business party Drasi called on New Democracy to come clean about the state of its bank loans after the conservatives insisted they are paying off their debts without delay.
European Competition Commissioner Joaquin Almunia told Drasi leader Theodoros Skylakakis, who is an MEP, that ND owes 145 million euros and PASOK a little less. The commissioner also said that the majority of the loans were non-performing as of January 2013.
Drasi called for further clarification and claimed that New Democracy is likely to be paying 11 to 12 million euros in annual interest, when its state funding only reaches six million euros a year.
While New Democracy and PASOK aren’t paying their loans, the coalition government is insisting that Greeks buried under pay cuts, tax hikes, slashed pensions and worker firings must pay theirs and as a ban on foreclosures was lifted to allow banks to start foreclosing on homes.