Syriza turns Greek oligarchs from taboo subject to economic priority

George Stathakis, Syriza’s shadow development minister, told the Financial Times last week that tackling the oligarchs’ grip on the economy “will be a priority” of a Syriza government.

Such comments already mark a change from form in Greece, where the oligarchs’ influence has long been felt but seldom discussed — at least publicly, the FT correspondent, Kevin Hope, comments.

The enemy  to competition

“The real enemy to market competition in Greece is the oligarchy, but it’s a taboo subject — politicians don’t discuss it and the media don’t write about it,” said to the FT Aristides Hatzis, a professor of law and economics at Athens University.

And the reason why there is no public debate in the media about the role of the oligarchs is simple, for as the article goes on to reveal, and as everyone here in Greece knows, the oligarchs own the media.

As evidence Kevin Hope offers a US embassy cable released by WikiLeaks, that said: “Greece’s private media outlets are owned by a small group of people who have made or inherited fortunes . . . and who are related by blood, marriage or adultery to political and government officials and/or other media and business magnates.”

No member of the close-knit oligarch community has yet been toppled by Greece’s seven-year economic crisis observes Kevin Hope, even though their media outlets are believed by some analysts to have racked up almost €2bn in unserviced loans from local banks as advertising revenues collapsed and handouts from state-controlled companies disappeared.

Greece has a long tradition of businesses relying on political contacts to push through deals — and despite a very generous political party state funding, of politicians seeking handouts from business to boost their electoral chances.

The scale of such dealing grew in the 1990s as Greece’s economy took off and big contracts for EU-backed projects were shared among a small group of bidders.

Resisting reform

The oligarchs have enough power to resist any government reforms that will diminish their influence, and prime ministers have in the past blamed the oligarchs for their downfall, as was the case with Costas Mitsotakis, or more recently, George Papandreou, who claimed he was brought down by oligarchs, after a 2011 finance ministry campaign to tackle widespread fuel smuggling revealed a Balkanwide scam that cost Greece €3bn a year in lost taxes. Of course there were a number of other things going wrong for the Papandreou government at the time, but it is worth noting that no action has yet been taken to tackle the fuel smuggling scam.

The heads of families

The current generation of oligarchs, already well past normal retirement age, are gradually handing over their day-to-day operations to younger family members while retaining their power over politicians through handouts to finance their election campaigns and arranging access to television coverage.

Costas Bacouris, head of the Greek arm of Transparency International, the anti-sleaze watchdog, believes that — as ever — the oligarchs will try to adapt to changing circumstances.

“They continue to wield influence but they’re taking a wait-and-see position with regard to future political developments,” Mr Bacouris says. “My understanding is that a number of them have been making contact with Syriza but it’s not yet clear with what outcome.”

Top oligarchs

Vardis Vardinoyannis: the 81-year-old patriarch of a Cretan family that controls MotorOil Hellas, Greece’s second-largest oil refinery, as well as a tanker fleet, a bunkering operation on Crete, an oil and gas exploration company and a five-star Athens hotel. The Vardinoyannis group controls one private television station, Star, and holds a minority stake in another, Mega Channel.

Michalis Sallas: the 64-year-old chairman of Piraeus Bank, which has become the largest Greek lender by taking over the healthy assets of two failed Cypriot banks and a Greek state-controlled bank during the crisis. A founding member of the PanHellenic Socialist Movement (Pasok) and former econometrics professor at Athens Panteios university, he has kept close ties since the 1980s with successive Greek prime ministers.

Spiros Latsis: the 69-year-old son of John Latsis, a London-based shipping billionaire who funded the UK Conservative party. The Latsis group is a partner with the Greek state in Hellenic Petroleum, the country’s biggest oil refiner. Last year Lamda Developments, its property arm, won a concession to develop Hellenikon, the coastal site of the former Athens International Airport. Lamda and its partners, Fosun of China and the Abu Dhabi sovereign wealth fund, made the only binding offer for the €5bn project, which a Syriza-led government may potentially cancel.

George Bobolas: the 86-year-old founder of Ellaktor, Greece’s leading construction company, who was accused by journalists and rivals in the 1980s of being a Soviet “agent of influence”. Mr Bobolas has always denied the allegation. The opposition Syriza party says it will review Ellaktor’s share of income from Attiki Odos, a profitable toll road to Athens airport if it comes to power. The Bobolas group is a minority shareholder in Mega Channel and controls Ethnos, a lossmaking daily newspaper.

Dimitris Copelouzos: aged 64, Gazprom’s representative in Greece since the 1980s and founder of Copelouzos group, an energy and construction specialist. The group recently teamed up with the German airport operator Fraport to make the winning €1.2bn bid for a concession to operate 14 regional Greek airports, (including Chania and Thessaloniki International airports), that would drive the country’s tourist development over the next decade.

Chania airport is currently undergoing an EU funded 110 million euro upgrade. This year it recorded a 10 million euro profit.

Thessaloniki airport is the largest state owned airport in Greece. It has recently had an EU funded 200 million euro expansion plan approved by the government. Its annual profits are in the region of 14 million euro.

It is expected that FRAPORT will impose a levy of 14 euro per departing passenger to raise the €1.4bn of investment in the airports over the duration of the concession.

Syriza has warned parliament may not ratify the deal.

Source: Financial Times


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