Tuesday 28 September 2010

Why doesn't the government enforce the law?

I have been watching the news of the past 24 hours, and honestly fail to see where this country is going. What is so disturbing to me is not so much the news itself, as the fact that major crimes are allowed to occur in broad daylight, with no consequences for the criminals. Let’s look at just two examples:

The Truckers’ Strike
The strike of truck owners and drivers continues, now in its third week. They are implementing a stop of all transport activity as a means of protest against the law on liberalisation of transport professions, which passed in Parliament on September 22nd.

As a result, according to the Athens Chamber of Commerce and Industry, there are:

·         over 6,000 containers “locked” in port – some reports speak of 13,500 containers
·         over 2,500 employees have been laid off
·         at least 120 major enterprises are idling or working reduced shifts
·         over EUR 2 mln per day in lost turnover is being incurred by enterprises.

Two things are stunning about this development:

a.       The law passed with the condition enabling truckers to depreciate the full cost of their license as a business expense over 3-7 years. In other words, the fee paid for their license is tax deductible. This is regardless of how many years the truckers have already been operating, or the fact that, under standard business practice, this depreciation should have already been factored into pricing and contracting.

b.      The truckers have been mobilised, or drafted into the military, since July to prevent fuel shortages. Yet today the truckers are on strike, parked at the side of the road, blocking other truckers from crossing the picket line, blocking trucks from loading on ships, etc. Although one expect such behaviour to be doubly illegal (illegal once for blocking legal movement of goods and passenger traffic, and illegal a second time because they have been mobilised), this strike is apparently not a strike. It’s a work stoppage (παύση εργασίας). In my opinion, it’s treason, and should be treated as such. Either they have been drafted, or they have not. 

In the meantime, Bulgaria has once again protested about the second major blockage of transport in 2 years (the first was the farmers in 2009-2010), while the European Commission has recommended Greece be taken to court for violating European law on the liberalisation of transport professions, which should have been done 5-10 years ago.

Once again, we are in a situation where a small handful of people enjoying disproportionate profits in a closed profession are able to shut down a country, despite the presence of legislation to the contrary. Instead of acting to force legal compliance, the Prime Minister was speaking at an educational conference in Delphi, with yet more proposals to “revolutionise” the higher education sector. Not a single thing has been said about the economic crisis affecting the business sector, which is now exacerbated by the truckers’ strike.

The irony, of course, is that if any private citizen followed the same tactics as the truckers, we’d be put in jail immediately. The other irony is that the vast majority of Greek businesses and citizens are tired of the illegal and extortionate behaviour of a minority, yet the government does not enforce the laws of the land. 

I suggest that if the truckers are not off the blockades and back at work within 24 hours, three corrective mechanisms kick in:

a.       Anyone found blocking the road, a harbour or railroad or other public place, or preventing another business or citizen from implementing their lawful activity is arrested and prosecuted and their vehicles be impounded.   

b.      The government issues 12-month, renewable licenses at EUR 500/license to anyone wishing to set up a transport company (who complies with the legal requirements for driving licenses), including through the use of rented vehicles.

c.       The real army and the police be mobilised and deployed to assure the free movement of goods within the country, and through its border posts, airports, and ports. 

Enough is enough.

The Vatopedi Scandal
The other amazing finding which has been making its round of the news programmes and print media is that New Democracy is claiming that there is no evidence that the Vatopedi land exchange resulted in a loss for the Greek state. To my vast surprise, I read today in Kathimerini that

The state’s official evaluators have delivered two reports on the property swap and neither was able to establish that the deal had left taxpayers worse off. The evaluations were both scrutinized by independent property evaluators, who found that the state officials had got their sums right. The parliamentary committee investigating the swap has now ordered a third evaluation.

This is simply unacceptable. The Vatopedi scandal resulted from the illegal exchange of commercially useless wetlands around Lake Vistonida, which were claimed by the Vatopedi monastery, against prime seafront land and government property, including parts of the Olympic village. Anyone with a calculator and a list of assets exchanged is able to calculate the relative value of the properties exchanged.

Over 24 months later, neither government has implemented a true forensic accounting of what should be obvious: that a major financial crime was committed against the Republic of Greece by the monks of Vatopedi, certain members of both parties, and a shady network of offshore companies, contractors and intermediaries. If the government is not in a position to correctly value the damage from the land deal, and has not done so already, then I suggest the following corrective measures:

a.       Fire the official evaluators who are not in a position to draw the obvious conclusions for gross incompetence and negligence;

b.      Force all members of the Parliamentary committee investigating Vatopedi to resign on ground of gross incompetence and appoint new ones;

c.       Censure and fine the current and former Ministers of Justice for neglect of duty and gross negligence; force them to leave Parliament;

d.      Investigate and prosecute any member of the government or the judiciary found to have covered up testimony or not followed the full letter and meaning of the law in this case;

e.       Turn the case should be turned over to an objective, independent forensic accountant selected by international tender within 1 month. Assure that this firm has the full backing of Greek and Cypriot governments–much of the money laundering occurred through Cyprus, and if that government does not cooperate, the Greek government should quite simply withdraw its military forces from the island and begin a tax audit of every Cypriot company operating in Greece;  

f.        The report will not take more than 3 months to publish, and the case should be turned over to an independent prosecutor with a mandate to make criminal charges and claw back the lost funds. If this means expropriating Vatopedi and turning it into a hotel, so be it. There are more than enough remaining monasteries and churches in Greece, and perhaps this will encourage them to respect the laws of the land and, possibly, even pay their taxes.

If the problem is a legal one, then the laws should be changed, since in this case they are a disgrace and an insult to the citizens and residents of Greece.

If any private citizen attempted to follow such a practise, he would be laughed out of the courtroom. Why is there a different standard in this case? How much money was made, who was implicated, and how many bribes were paid, for there to be a legal deadlock in what is a painfully obvious case of financial crime?

But instead of a search for a solution, Greece’s elected leaders search for political blame. Instead of real measures to reassure investors and its own citizens that Greece follows the rule of law, we have endless dithering and political committees. In the meantime, we are sliding rapidly into a deeper recession, while our international reputation deteriorates still further.

I can’t imagine why Cosco or Abu Dhabi Mar or anyone else would want to invest in Greece given the illegal transport blocks, the militant and illegal unionism, the illegal delays in VAT reimbursement and the long string of broken promises the Greek government has given to its citizens, and to the investors that entrust it.

Both these cases should have served as a litmus test in which the government stood up to illegal behaviour and enforced the law. Instead, it has failed, and we will be paying the price into 2012 and beyond. And in the meantime, the same corrupt political class will be elected in the regional and local elections in November, and apparently nothing will happen. But maybe we will have a revolution in higher education.

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