A nexus of media, business and politics lies behind the country's crisis, say critics.
By Stephen Grey and Dina Kyriakidou
(Reuters) - In late 2011 the Greek
finance minister made an impassioned plea for help to rescue his country from financial ruin. "We
need a national collective effort: all of us have to carry the burden
together," announced Evangelos Venizelos, who has since become leader of
the socialist party PASOK. "We need something that will be fair and
socially acceptable."
It was meant to be a call to arms; it ended up highlighting a key weakness in Greece's attempts to reform. Venizelos'
idea was a new tax on property, levied via electricity bills to make it
hard to dodge. The public were furious and the press echoed the
outrage, labeling the tax ‘haratsi' after a hated levy the Ottomans once
imposed on Greeks. The name stuck and George Papandreou, then prime
minister, felt compelled to plead with voters: "Let's all lose something
so that we don't lose everything."
But
not everyone would lose under the tax. Two months ago an electricity
industry insider revealed that some of the biggest businesses in the
land, including media groups, were paying less than half the full rate,
or not paying the tax at all. Nikos Fotopoulos, a union leader at power
company PPC, claimed they had been given exemptions. "It was a gift to the real bosses, the real owners of the country," he said. "The rich don't pay, even at this time." This
time the media made little fuss. "The news was not covered by the media
... because media owners wee among those favored," Fotopoulos said
later. Leading daily newspapers in Athens either did not mention or
downplayed his claims, a review by Reuters found.
To
many observers the episode illustrates the interplay between politics,
big business and powerful media owners. The interwoven interests of
these sectors, though not necessarily illegal or improper, are seen as
an obstacle to Greece's attempts to rescue its economy. They are, say
critics, partly to blame for the current crisis and for hindering
reform. Leading media owners
contacted by Reuters denied exerting any improper influence or seeking
favors, or did not respond to questions.
But
given the international impact of Greece's crisis, concerns now extend
beyond the country. A source in the troika of lenders keeping
Greece
afloat - the European Union, International Money Fund and European
Central Bank - said: "The system is extremely incestuous. The vested
interests are resisting reforms needed to make the economy competitive."
Opposite
sides of the Greek political spectrum speak about the subject in
colorful terms. "In Greece the real power is with the owners of banks,
the members of the corrupt political system and the corrupt mass media.
This is the triangle of sin," said Alexis Tsipras, leader of Syriza, the
main opposition. Panos Kamenos,
leader of the right-wing Independent Greeks party, said: "The Greek
media is under the control of people who depend on the state. The media
control the state and the state controls the media. It's a picture of
mutual blackmail." Others are more
measured. Asked about the haratsi tax, Venizelos acknowledged there
were some "blatant cases of paying less tax or none at all", but blamed
this on poor records held by the state-run electricity company. "In no
way was there any discrimination in favor of specific property owners,"
he said.
Simos Kedikoglou, a government spokesman, said officials were monitoring the property tax and any errors would be rectified.
Previous
efforts to curb potential conflicts of interest - in particular
relating to the media - have had little effect, according to a European
Commission report on media freedom and independence, published in
December 2011. It said Greek media policy "has remained highly
centralized in the hands of the government of the day," and that it "has
been thoroughly influenced, albeit in opaque and informal ways, by
powerful economic and business interests who have sought to gain power,
profit, or both."
RISE OF PRIVATE MEDIA
Interplay between politicians and the media is common in many European countries, notably in
Italy where Silvio Berlusconi was both prime minister and head of a media group, and in the UK, where media owners such as
Rupert Murdoch, chairman of News Corp, have had contacts with successive prime ministers.
But
critics say such connections are particularly significant in Greece
because the state plays a large role in the economy, and because of the
way media has developed there.
Private
radio stations and TV channels emerged only in the 1980s, after decades
of state media control. As businessmen hurried into the fray,
regulation was haphazard. Successive governments let broadcasters
operate without proper licenses, according to the 2011 EU report on
Greek media. This semi-regulated approach led to Greece having a large
number of media outlets for its population of 11 million.
In
2009 the country had 39 national daily newspapers, 23 national Sunday
papers and 14 national weekly papers, according to an earlier EU study
of media. Per capita, Greece has far more national newspaper titles
than, say,
Germany or the UK. The country also has nine national TV stations, six of them privately owned, and numerous private radio stations.
A 2006 cable from the U.S. Embassy in Athens, obtained by
Wikileaks,
noted: "How can all these media outlets operate profitably? They don't.
They are subsidized by their owners who, while they would welcome any
income from media sales, use the media primarily to exercise political
and economic influence." At the same time, much of the economy outside the shipping industry depends on state contracts or licenses." Most
companies in Greece are essentially waiting to get money from the
state," said Theodoros Roussopoulos, a former government press minister.
"Greece is officially capitalist, but in effect socialist."
Media
owner Ioannis Alafouzos told Reuters that some of the media "are in
effect press offices for business groups." Alafouzos, whose family owns
SKAI TV, Greece's fifth largest station, and Kathimerini, a leading
newspaper, added: "It's developed into a completely unhealthy situation.
The purpose of media has been largely to execute specific tasks for
their owners." Alafouzos, whose
wealth comes from shipping, said his family had been careful not to
depend on government dealings. His critics say that SKAI was among the
companies found to be paying no haratsi tax - an omission SKAI says was
caused by local bureaucracy - and that his media interests benefit from
state advertising. Alafouzos described the latter as a minimal
proportion of his media interests' revenue.
FAMILY CONNECTIONS
One
nexus of interwoven interests is MEGA Channel, Greece's biggest TV
station, which is co-owned by businessmen who are leaders in, or have
strong connections to, other sectors of the economy. The
biggest collective stake in the TV station is owned by members of the
family of George Bobolas. One of his sons, Fotios, is a director of
Teletypos, the channel's holding company. Another son, Leonidas, is
chief executive and a major shareholder of Ellaktor, a construction
giant founded by his father that has participated in multi-billion euro
contracts with the state. Leonidas has no stake in Teletypos. The
Bobolas family also controls Ethnos, a popular daily and Sunday
newspaper, other print media and websites. From the large, grey
headquarters of their
publishing
company in Halandri, a northern suburb of Athens, the extent of the
family interests is evident. Nearby is the Athens ring-road, built by an
international consortium that included Ellaktor. Alongside the road is a
new railway line to the airport, also built with Bobolas involvement. George
Bobolas did not initially respond to questions about his family's
various interests. Instead, his newspaper Ethnos published several
articles in the days after Reuters submitted questions to him. One
alleged that Reuters "continues, it seems, to target our country, the
Greek economy and entrepreneurship." Another described Reuters as a
"fifth column" for the troika and alleged that Athens was being flooded
by foreigners out to "undertake the demolition of public figures
according to Anglo-Saxon practices." After
a further request from Reuters, Bobolas said in a letter: "I have never
used the media owned by companies in which I participate, for the
promotion of interests of the holding company Ellaktor S.A. ...
Newspaper Ethnos has never used influence or asked any favors from
rulers, for the benefit of Ellaktor." Bobolas
said former prime ministers could verify he had never asked for any
favors and added: "One could say that Ethnos' severe judgment on
governmental actions and politicians in general, could be considered as
obstacle and not help to Ellaktor's corporate interests". In
a written statement, construction firm Ellaktor said its subsidiaries
engage in both private and public contracts, and that it pursues public
contracts "by participating exclusively in open international tenders,
in accordance with Greek and European legislation."
Other
figures involved in MEGA Channel include the family of Vardis
Vardinoyannis, who is prominent in oil and shipping, and Stavros
Psycharis, who controls the DOL media company. George
Vardinoyannis, son of Vardis, serves on MEGA Channel's board, and the
family also owns a smaller station called Star Channel. The family is
also the major shareholder in Motor Oil Hellas, one of two Greek
refinery operators. In an email, a
spokeswoman for the family said: "Most of our companies are based abroad
or have an international exposure. The production and sales of Motor
Oil Hellas refinery, our biggest investment in Greece, are consistently
70 percent export oriented ... None of our companies rely in any way on
government contracts or business."
Psycharis,
whose company DOL publishes leading newspapers and has won state
contracts in education, culture, travel, and printing, is MEGA Channel's
chairman. In 2006, he sued two
investigative journalists who alleged on a radio program that he lobbied
for the sale of Eurofighters to Greece and had used his newspapers to
promote the merits of a deal. Psycharis denied the allegations. Three
years later, after a court hearing, his case was dismissed. The
court rejected one claim by the journalists, but accepted that
Psycharis' newspaper had campaigned for the Eurofighter deal. An appeal
is pending. Psycharis did not respond to questions about the case. In
late November one of his newspapers chastised Apostolos Kaklamanis, a
former speaker of the Greek parliament, who had told PASOK lawmakers
that the era when oligarchs "appointed the party leader" had passed.
Days after Kaklamanis spoke out, To Vima, a leading newspaper controlled
by Psycharis, ran an article referring to his comments and promising to
make allegedly embarrassing revelations about Kaklamanis. Psycharis did not respond to questions about his media holdings or his wider interests. Critics
of links between media and business also cite the case of a gold mine
project in Halkidiki, northern Greece. The mines were sold by the Greek
government in 2003 to a newly-formed Greek mining company. Soon
afterwards the construction firm in which the Bobolas family has an
interest acquired a stake in it. Local
opponents campaigned vigorously against a license for the mining
project being granted, claiming it would harm the environment. Tolis
Papageorgiou, a leading figure in the protest group Hellenic Mining
Watch, alleged that newspapers controlled by the Bobolas family failed
to report large demonstrations opposing the mine and vilified an
environment minister, Tina Birbili, who blocked a license for it. "Just
days into her new job in 2009 she became the target of media controlled
by Bobolas because she refused to issue a license to the mining
company," Papageorgiou alleged. Soon
after Birbili's appointment in 2009, newspapers owned by the Bobolas
family christened her "Green Tina" and criticized her performance.
Reports said she was blocking many kinds of development. The articles
did not mention that the newspapers' owners had a family interest in the
mine or the construction trade. In
his letter to Reuters, Bobolas said that Ethnos strongly supports
large-scale projects that create employment and help the country recover
from its economic crisis. Birbili,
who declined to comment for this article, was sacked in June 2011; a
license to operate the mine was subsequently granted. After it was
issued, construction firm Ellaktor, according to its annual accounts,
booked a profit of 261 million euros from partly selling off and partly
revaluing its stake in a Canadian company that had by that time bought
95 percent of the mine. A former
aide to the Greek prime minister of the time said Birbili's sacking was
not related to the mine. The former environment minister who authorized
the license, George Papaconstantinou, said "the decision was made solely
on the basis the environmental impact study", which had been positive
about the mine. In his letter to
Reuters, Bobolas said the only remaining connection his family has with
the mine is his son's indirect stake of less than one percent.
TWO HATS
In
the media, potential conflicts of interest can arise even at low
levels. Tucked away inside the headquarters of the Athens union of
journalists, ESHEA, is a list of its members who work for the
government, for example in press offices; dozens wear a second hat as
newspaper journalists at the same time. The
union's rules ban its members from working for bodies they cover as
journalists. In an effort to unmask those breaching that rule, the union
obtained a list of government-employed journalists in 2005. But it was
never published. Some of those named on the list complained; Greek officials judged that
publishing the list would violate personal privacy. It was a decision that Dimitris Trimis, the union president, calls a serious defeat. "There
is a triangle of political powers, economic powers and media owners,
and nobody can tell who has the upper hand," he told Reuters, sitting
under the dusty portraits of his predecessors. "It starts from the top,
between the minister and the publisher, and it trickles down to the
press office and the journalist. It's a pyramid." One
example, he said, was a TV studio set up in 2007 by the Agriculture
Ministry to promote its activities. Although about 50 people, including
political journalists, were hired, only a few had anything much to do,
he said. "Many more than would be needed were hired and it was clear it
was a perk," Trimis said.
A spokesman for the ministry said the studio never employed full-time staff and that it closed in 2009. Reuters
has identified at least nine press officers for financial institutions
who also write in the media, which has largely failed to report the need
for the nation's financial system to be reformed. The "double hatters"
include Alexandros Kasimatis, a financial journalist at a Sunday
newspaper, who also works as head of public relations for the Capital
Markets Commission (CMC), a key financial regulator of listed companies.
Reuters could find no articles by Kasimatis, who writes about companies
but not the CMC, in which he declared his CMC role. Kasimatis
said: "It is not a conflict of interest. The Athens Journalists' Union
allows members to work at press offices provided they don't cover who
they work for. And I never write about the CMC." In an email to Reuters, Costas Botopoulos, chairman of the CMC, said Kasimatis' two jobs were compatible. Another
journalist, who did not face direct conflicts of interest, was still
nicknamed Ms Light-Water-Telephone by fellow journalists because she was
said to work both for To Vima newspaper and three public utility
companies. Ioanna Mandrou, who now works for Kathimerini and SKAI TV,
confirmed she had worked in the press office of OTE, a state telecoms
company, and briefly as a consultant to a state water company. She said
she had not worked for an electricity company. "In
To Vima I was a reporter covering judicial affairs and that had nothing
to do with my work in OTE. And when I say I 'worked' for OTE, I
literally mean I worked," she said. "I can tell you that around 95
percent of the people employed in similar jobs do nothing." She said it was common for politicians to arrange such jobs as favors. Kedikoglou,
the government spokesman, said members of the journalists' union "have
the right to work in state companies and as press officers under certain
conditions and providing that they do not have conflicting interests."
PROSPECTS FOR CHANGE
Over
wine
and kebabs on a cool October evening in 2004, then prime minister
Costas Karamanlis declared war on powerful forces in Greek society. "We
will not let five pimps and five vested interests manipulate our
political life," he told conservative lawmakers invited for dinner at
Bairaktaris taverna in Athens, according to people present at the
meeting. He did not specify who he was referring to. Karamanlis'
subsequent efforts to restrict access to state contracts by media
owners were met with full-frontal attacks from the press. But in the
end, defeat came from the European Commission: in 2005, it said
Karamanlis' plans violated EU competition rules, forcing him to scrap
them.
Since then, no significant
attempt has been made to tackle the interweaving of interests.
Politicians who clash with media owners risk a bad press, according to
one senior Greek politician who spoke to Reuters about his experiences
when he was a minister in a former government. In one instance, he said,
a media owner asked him to help stop a judicial investigation into the
media owner's affairs. And, in another, a newspaper publisher who owed a
million euros to a state-owned company contacted him seeking a deal to
escape the debt. "He said ‘I will
put an advert for the state-owned company every day in the paper to
settle it.' He expected me to call the company and make a deal. I
refused to intervene," said the ex-minister, who spoke on condition of
anonymity. He said he was subsequently the subject of negative reports
in the publisher's paper.
The
persistence of potential conflicts of interest is reflected in the
latest Corruption Perceptions Index compiled by the campaign group
Transparency International (TI). It ranked Greece 94th - 14 places lower
than in 2011 and the lowest ranking of any
euro zone
country - and the group's Greek branch concluded "there are significant
structural issues with the executive, the media and the business
sector." Kedikoglou, the government
spokesman, said ministers now want to "normalize" broadcasting. The
government intends to reform the regime of "provisional licenses" and
bring in "legislation that will permanently set the rules applying to
the television market," he said. Even
without legislation, the landscape is changing. By 2013 Greece's
economy will have dwindled by a quarter in five years. Financial
pressures have intensified. Advertising has shrunk and a Reuters study
of recently-published accounts shows the top 18 Athens-based media
companies have declared debts totaling more than 2 billion euros.
At
the same time the international lenders keeping Greece afloat want real
reform in exchange for their billions. They are, for example, demanding
that trustees appointed by the troika sit on bank boards and have the
final say in approving major loans, including those to media
organizations. The newspapers
Ethnos and To Vima reacted to that proposal with scathing editorials.
"Greece is not a colony," wrote Psycharis in a front page article in To
Vima. "I address those who think that what the Third Reich failed to do
will now be achieved by Europe's money peddlers."
(Additional reporting by Nikolas Leontopoulos and Costas Pitas; Editing by Richard Woods and Simon Robinson)
