The Group of States against Corruption was set up in 1999 by the Council of Europe. It has an unfortunate official acronym: GRECO – which rather brings one particular European state to mind.
But now that we’re on the subject of Greece, let’s take a look at an under-reported aspect of the Greek debt crisis, covered, in this instance, by George Georgiopoulos and Stephen Grey for Reuters:
232 million Euros is a truly staggering sum. It’s as if, in Britain, Labour and the Conservatives had a combined debt of around £1 billion (adjusting for population size).
You might wonder what the Greek banks were thinking of in lending so much money to these two parties. But, as it happens, there was a business case, of a sort. Greece, like most other EU states, has a system of public funding for political parties – a very generous system, you won’t be surprised to hear:
With a seemingly secure revenue stream, it’s unsurprising that the banks were willing to lend against it. Except there’s a catch – the overall pot, you see, is divided up according to vote share:
Oh dear. Like so many dodgy investments across the Eurozone, this one isn’t working out as expected. However, the implications aren’t just financial:
The example of Greece shows how public funding of political parties can create as many problems as it solves. However, if we in Britain do move towards a fully fledged system of taxpayer subsidies for political parties, then at the very least we should ban the recipients from borrowing against these ‘guaranteed’ revenues.