The Oligarchs of Greece

Greece’s powerful oligarchs exert influence over business, finance and media.

And the government sees the oligarchs as some of the biggest tax evaders in Greece.

Journalist and author Misha Glenny speaks with anchor Marco Werman about Greece’s ultra-wealthy.

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Marco Werman: Italy is now trying to do what Greece has been attempting to, that is to reassure the rest of Europe and the world that despite political turmoil the country can get its economic house in order. Greece has some additional domestic demons to wrestle with, the very rich. These Oligarchs are Greece’s one percent if you will. They exert a lot of political influence and some accuse them of not paying their fair share of taxes. Journalist and author Misha Glenny wrote about Greece’s oligarchs in today’s financial times.

Misha Glenny: We’re talking about 20-30 families who control the commanding heights of the Greek economy. And one of the big problems about them is that their favorite sport is tax evasion, and so Greece faces a double whammy as it were of a bloated public sector and chronically insufficient tax revenues because the rich squirrel their money away outside of Greece, off shore, indeed in other parts of Europe. And the Greeks have never been capable of tracking that money down and getting a hold of it. But we’re talking about billions upon billions of euros every year.

Werman: Is tax evasion the main crime that these oligarchs are guilt of? Is it the only crime?

Glenny: No, it’s not the only thing. I mean they are so influential that they have for example, it was a liberalization of the Greek broadcast and print media in the 1980s. What you saw was essentially each clan as it were buying up its own television station, its own newspaper and exerting huge influence over politics. I mean most politicians have been in the pockets of these people for a very long time. And this is one of the reasons why George Papandreou who was trying as Prime Minister to break this pattern, why he came under such attack, not only from the opposition who are heavily influenced by some of these groups, but also by people in his own party who were also linked up with them.

Werman: What is George Papendreou doing to try and tame these oligarchs?

Glenny: Well, he was encouraging investigations into some of the criminal operations, but he also started by trying to increase tax revenues by going after some of the bigger tax evaders. That, he soon found to be a very self destructive policy to pursue and there was a huge outcry, particularly in the media, from the usual sources as it were claiming that he was trying to impoverish all Greeks by not only introducing austerity measures, but upping their taxes as well. And this simply wasn’t true. He was just trying to go after what was due to the country. You know, he made some headway in that, but has largely failed, not for the want of effort, but because of the fact that too many vested interests have got in his way….

Werman: Misha, give us a sense here. If these oligarchs were brought to heal by the government of Papandreou or any government, how much of Greece’s financial problems could be resolved do you think?

Glenny: Well, in the long term all its financial problems could be resolved, in the long term, because you would start to whittle away the chronic budget deficit. This of course would be done in conjunction with the sanitization of the public sector, which is undoubtedly bloated and undoubtedly needs reform and cutting down. But what it would do in the long run is place Greece on a rational economic path so that it could actually deal over the next 10-15 years with its spiraling budget deficit. I mean I think at the moment that this looks now very, very unlikely, particularly after the change of government. And what we’ve seen in Greece in the past 10 days and particularly the role that it plays in triggering, in augmenting the crisis in Italy, is we are steadily approaching an Armageddon in Europe, economically, a real meltdown, which is going to be a global economic crisis. Already there are signs that people may start investing away from the euro and into the dollar, and this would be catastrophic for the United States to see a strong dollar, just at this time when the United States is trying to reinvigorate itself economically through exports. So we’re about to move very quickly from a Greek to an Italian to a European crisis, which very, very swiftly will look like a global economic crisis. I mean this does look to me like 1929 to 1931.

Werman: Misha Glenny wrote about Greece’s oligarchs in today’s Financial Times. His latest book is Dark Market: Cyberthieves, Cybercops and You. Misha, thanks very much for your time.

Glenny: You’re welcome, Marco.

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