PRESIDENTIAL candidates are engaged in a battle for the votes of the bank bondholders and Laiki depositors, who have been vociferously demanding compensation from the state for their losses in 2013. Who will win the battle nobody knows – it may end in stalemate – but there will be one certain loser: the taxpayer, who will pick up the bill for this ruthlessly cynical vote-buying.
Nicolas Papadopoulos started it all by announcing that if he were elected he would ensure bank bondholders, depositors, shareholders that were bailed-in would be compensated by the state. There were ways and means to achieve this, he claimed, claiming that a part of the annual budget surplus could go towards compensating all haircut victims, the total losses of whom amounted to almost €10 billion.
Realising this would give Papadopoulos an electoral advantage President Anastasiades’camp came up with the idea of setting up a National Solidarity Fund, which would gradually compensate the haircut victims. Only part of the losses would be covered, said Disy chief Averof Neophytou, who co-sponsored the Fund bill with presidential candidate Giorgos Lillikas. As a first step, the government would deposit €25 million – a supplementary budget bill was prepared – and would increase the reserve by selling state land. Once the reserve reached €300 million there would be discussions as to how it would be allocated, said finance minister Harris Georgiades.
This week Papadopoulos tried to regain the initiative, by submitting a bill to the legislature that would amend the law on the establishment of a National Solidarity Fund. The aim of the amendment was to put in law specific ways of diverting money to the Fund; it proposed an annual contribution from the primary surplus of the state budget, from revenue from the repatriation of capital and from the sale of state land. This would make the Fund viable and allow it to perform the role for which it was set up, the Papadopoulos camp said.
Neophytou was on Wednesday accused by the parties backing Papadopoulos that he used his position, as Chairman of the House finance committee, to block discussion of the amendment bill, for purely electoral reasons. This could be correct, as the amendment if passed, would put the financing of the Fund on a firm basis, which the Neophytou-Lillikas bill avoided doing. The passing of the amendment would also allow Papadopoulos to pose as the real champion of the haircut victims.
This generosity with the taxpayer’s money is scandalous. The state has covered 75 per cent of the losses of the pension funds and that should be enough. Unfortunately, no candidate will take such a line, because they all subscribe to the irrational view that the state is an all-purpose compensation agency.