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A 116.5 million euro black hole in PASOK’s cash

01 May 2013 / 20:05:00  GRReporter
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Anastasia Balezdrova

The atmosphere among Greek socialists is almost military after the stormy meeting between former and current Presidents, George Papandreou and Evangelos Venizelos. Despite attempts by party PRs to dispel the clouds, many members of PASOK argued that bickering between the two politicians is now taking the form of a blind confrontation.

A lot of people are talking about the danger of the party splitting, after deputies split into two camps as well. Close associates of Evangelos Venizelos even advised him to disassociate with the former Prime Minister and settle accounts with the two tendencies in the party.

Commentators argue that the unity of the party is hanging by a thread. Uncertainty is raising concerns among partners in the governing coalition too. Sources in the party headquarters of the Socialist Party denied the probability that George Papandreou, whose father, Andreas Papandreou, was founder and leader of the party for decades, will end up outside it. In all cases, the management will wait for the audit of party finances to be finalised before it calls party bodies to make a decision.

The beginning of the end of the relationships between Evangelos Venizelos and George Papandreou started with their meeting yesterday in Venizelos’s office in Parliament. The party leader asked for the meeting after the months-long absence of the former Prime Minister abroad.

Following comments about the situation in Greece, the discussion continued up to the economic situation of the party. Then PASOK's leader told George Papandreou that he had to give explanations to party bodies about the financial mismanagement in the period in which he was the head of the party. The discussion between the two of them came a day after an excerpt of the report of auditors, who took on the task of investigating what money from party funds has been spent on was leaked in the press. From 2003 to 2011, the party accumulated loans amounting to 116.5 million euro. Repayment of loans, together with the almost 90% reduction in state funding, left PASOK in a very difficult financial situation. The leaked excerpt indicated that the party had spent 200,000 euro on a trip of the former Prime Minister to Costa Rica. Party sources said that Evangelos Venizelos "almost had a stroke" when he saw the amount of 200,000 euro.

A month later, in April 2012, the former Prime Minister submitted a new request for the funding of his trip to Cape Town in South Africa, where the organisation re-elected him president. At the time, Evangelos Venizelos reacted strongly and George Papandreou said that "PASOK honours the fact that I was re-elected president of the Socialist International."

During yesterday's meeting George Papandreou expressed his displeasure regarding the "unacceptable, despicable, immoral and false information on the economic governance of the party" at a time when he was its leader.

Those familiar with the situation in PASOK reckoned that it was impossible that he would attend a meeting which would discuss finances and liabilities of the party in recent years. Relations with Evangelos Venizelos have been strained to such an extent that he even refused to take the folder containing economic data that the current party leader gave him. People from the close circle of George Papandreou argued that he cannot cooperate with people who seek to debase him morally.

For more information, GRReporter contacted journalist Christos Koutras who has been following events in PASOK for years and is very familiar with them.

Mr. Koutras, why was this particular time chosen to investigate PASOK’s finances?

This was the promise of Evangelos Venizelos from the moment he took the leadership position in the party. It's just that the whole story broke out in the media, when an excerpt of the auditors' report was leaked. The check itself has been carried out for several months.

This issue is starting to become a showdown between the previous and current party leader. Why is this happening now?

The conflict between Evangelos Venizelos and George Papandreou is not new. It began in 2004 when Papandreou took over the party after an agreement with Costas Simitis and it broke out in 2007 during the internal party elections. Venizelos and Papandreou have never had a good relationship and have always viewed each other with suspicion. Now the time has come for Evangelos Venizelos to express what he thinks of George Papandreou. But the truth is that PASOK’s funds are empty and this makes his task particularly difficult.

What will be the consequences of these events for the party? Will rumours be confirmed that an internal opposition has been established and there is a conflict between supporters of the two?

There is an internal opposition in all parties, and PASOK is no exception. Consequences will not be good, since George Papandreou is supported by a strong minority, and it is quite certain that there will be supporters, as has already happened. If Evangelos Venizelos reaches the end it is highly likely that the party will split.

What would be the future of PASOK without the Papandreous?

It would be unclear. PASOK is in the poorest possible state, but most commentators would bet that if George Papandreou headed the party, things would be much worse. Anyway, the path that the former Prime Minister has chosen - with travels abroad and interviews for foreign media - only shows that he is not looking at the Greek scene, but at the international one. The Papandreous, mostly because of founder Andreas Papandreou, represent the PASOK party itself and George Papandreou is not likely to leave.

Tags: Politics PASOK Evangelos Venizelos George Papandreou party funds audit
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