Cometh the hour, cometh the man

Illustration by Manos Symeonakis

In times of crisis, you need politicians that are level-headed, make well-judged comments in public and have an ability to empathize with pressurized citizens. Greece has Theodoros Pangalos.

The outspoken deputy prime minister provoked a strong public and media reaction when he claimed last week that he would have trouble paying the emergency property tax. Pangalos explained in a live TV interview that his bill would be particularly large as he had the misfortune of inheriting several properties. The PASOK veteran said he was being forced to sell one of these properties to raise money to pay the tax. When asked what he would do if he couldn’t pull the deal off, Pangalos suggested that Finance Minister Evangelos Venizelos might put him in jail.

Speaking on Skai TV’s “New Files” this week, Pangalos defended himself by saying he had simply been describing a tricky financial situation and was joking about Venizelos arresting him. Humor is an acceptable, if not necessary, part of dealing with the crisis but there is a fine line between poking fun at a situation and toying with people’s pain. Unfortunately, Pangalos flopped over that line.

This month, millions of property owners across Greece will be receiving inflated electricity bills due to the emergency tax being levied on households, which will add several hundred euros to the average Greek family’s tax bill. Those bills will land on doormats just a few weeks after millions of Greeks received bills for the so-called solidarity tax, a levy designed to raise money for the growing number of unemployed. The taxes are being levied against salaries and income that have already been taxed. The solidarity tax is a charge on gross income and the property tax is being demanded in addition to the regular real estate tax homeowners pay each year.

The combination of these taxes has put a sudden strain on the finances of taxpayers and families who had been keeping their head above water despite the austerity drive over the last two years. Many of them now face being dragged into the vortex within which so many Greeks are finding it impossible to meet their commitments.

For these people, Pangalos’s real estate portfolio is of no interest. As a public figure, he has no business airing his private financial concerns in front of the TV cameras. The deputy prime minister is an intelligent man and he should have enough nous to appreciate that it’s insulting to talk about selling one of your properties to pay a tax when many of the people you serve are getting rid of basic possessions.

That alone would be bad enough but there was plenty more salt to be rubbed into the wounds. As a parliamentary deputy, Pangalos is among the most privileged members of Greek society. In fact, Greek MPs are so well rewarded that when faced with the challenge of paying an extraordinary tax bill that runs to several thousand euros, the answer to their problem is simple: Give up one of their monthly salaries.

Lawmakers have consistently ducked questions about how much they earn. Unlike other European countries, Greek lawmakers’ wages and benefits are not published online. But the Irate Greek blog this week published what it claims are details about MPs salary structure. It alleges that their basic monthly pay is about 8,500 euros before tax, which is equal to the top-paid public servant. Other reports claim a figure closer to 6,000 euros. However, nobody disputes that on top of their salary, deputies get bonuses for taking part in parliamentary committees and subsidies for staff, office and travel costs.

Given that the bonds of trust between voters and politicians are snapping each day, some MPs have tried to shed certain benefits as an act of solidarity with the electorate. The New Democracy deputy for Lesvos, Spyros Galinos, revealed this week that he has turned down the option of receiving a 1,000 euros per month accommodation subsidy, a 1,500 euros per month stipend for renting a car, first-class air tickets, two police officers as a security detail and a civil servant as an assistant. Like the Democratic Left MPs, he also waived the 150-euro fee he receives for each appearance on a parliamentary committee.

It should also be noted that despite state pensions being scaled back, MPs can still claim a monthly retirement payment of some 1,400 euros, more than almost all Greek retirees, if they serve just 48 months. Furthermore, as the government looks to slash waste and reduce public expenditure by putting 30,000 civil servants in a standby labor pool, it might want to think about making cutbacks in Parliament, whose budget doubled between 2000 and 2009, when it reached some 220 million euros. According to Eleftherotypia newspaper, over the last two years, costs have been reduced but still stand at 198 million euros. Some 1,300 people are employed by Parliament, compared to less than 700 a decade ago.

Greeks’ faith in their politicians is at a record low and such great discrepancies between what people experience in their daily lives and the privileged environment of the political elite should be a cause for supreme concern as it threatens democracy’s foundations. In his nonchalance, Pangalos has given those pillars an almighty jolt.

Rather than contrition, the political system appears to be showing disregard. If this continues, Greece will soon find that political bankruptcy is its first stop on the road to financial bankruptcy. Not even an MP’s salary or the sale of one of Pangalos’s properties will be enough to cover the cost of such a collapse.

Nick Malkoutzis

2 responses to “Cometh the hour, cometh the man

  1. Dear Nick,
    Thanks for publishing the post above. As you know I believe there is a need for this discussion to be held, I am outraged by MP’s response to anyone raising this topic, and I certainly would not have found words as polite as yours to express my reaction at Deputy PM T. Pangalos’s statements.
    I wish however to make two small corrections to you post:
    1. Greek MPs gave up their 13th & 14th salaries since 2010 per parliament decision 6708/4614/2010. The link is available on my blog post.
    2. You say that I claim that their basic pay is about €8,500 before tax. I do not “claim”. I quote the law and the official decisions of the plenary session of parliament and the ministry of finance. This is the effective situation in Greece until someone can prove that there is a different, more recent law or decision overrriding the one I quote. Those “claiming” a €6,000 figure are indeed claiming – they are the ones who cannot or do not provide evidence of their claim. The links to all the relevant laws and decisions are available in my blog post here
    Thanks again for posting this. I hope they are listening (although I’m not holding my breath).

  2. Apos_the_Cousin

    Dear Nick,
    reading any article mentioning the emergency property tax reminds me of the unfairness of it all.
    As I understand it, the property tax is to be collected through the electricity bills and will be calculated on the basis of the surface area of the property as it has been declared to the electricity company. Incidentally, this is the way community charges are calculated as well.
    This is where my objection is. As I am not a homeowner, I have rented six houses in the last 15 years. Only one of the six was shown on the electricity bill to be anything close to its real size. The most outrageous one had three apartments on three levels, totaling well over 400 sq.m. but was declared as a mere 34 sq.m. property (the landlady had actually installed secondary internal electricity meters to be able to split the single bill between the three tenants!)
    It is my view that, far from a hard-to-swallow but just tax, this is one more case where the interwoven inadequacies of the Greek taxation system handsomely reward those who cheat and harshly punish the law abiding citizens.
    Thank you for the space and keep up the good work,

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