A metro station in Athens, a year before the financial crisis kicked off globally. Dutifully I buy my last ticket of that summer vacation in the Athens metro in order to reach Eleftherios Venizelos airport. My local Greek friend helps me to eschew a bit of confusion by showing me, which one I should buy. I take my ticket and run to validate it, while many other people surprisingly cross the barrier without bothering to mark their travel cards. When I turn to my friend again to clarify my uncertainty, he nods and starts smiling: “We are going to the airport, no one really checks tickets. Just in the last stop before the airport where all the locals normally get off, the control comes in. Tourists usually are confused about which ticket to buy, and if they have the wrong one, they get fined”. To my surprise, his words came true in an instant: some tourists actually got fined for having the wrong type of ticket type in the stop right before the airport, exactly the way my friend had described.

Photo credit: GNU Free Documentation License , Creative Commons Attribution-ShareAlike 3.0 Unported (CC BY-SA 3.0)

Athens Metro Syntagma Station     Photo credit: GNU Free Documentation License , Creative Commons Attribution-ShareAlike 3.0 Unported (CC BY-SA 3.0)

This experience was disappointing. Misuse of power while discriminating certain groups of people, embezzlement, a culture of clientelism and other forms of corruption have been rampant in Greece.

Corruption: A Worldwide Phenomenon

In general, corruption is an omnipotent issue in most parts of the world. In the developing countries it is said to be a main source of democratic breaches and severe economic distortions. In fact, corruption fosters a vicious circle preventing poverty to be eliminated and economic progress to be reached in the most underpriviledged parts of our planet.

Corrupted political and institutional settings create distrust, uncertainty and tend to contain large bureaucratic apparatus. All these factors combined together discourage foreign aid and, chiefly, new investments. Without new foreign investments, a country cannot offer heterogeneous and competitive labour, goods and, mainly, financial markets. Financial markets is are a key determinant in eliminating poverty, when the most impoverished of society can borrow funds and invest in an activity guaranteeing a source of constant income. Such effects of corruption in the developing world are rather straightforward, however, less so are the outcomes of corruption in the developed countries.

Corruption tends to be closer than one might expect.

According to the European Commission, the cost of corruption is €120 billion annually in all member states combined and it is comparable with the budget of the whole European Union.

Consequently, all the European Union countries tend to suffer from a certain degree of corruption. As in the developing countries, corruption is largely correlated with the GDP per capita of a nation: richer countries tend to have more accountable governments and institutions, therefore, corruption is evidently lower there. Sweden, Denmark, Finland and Luxembourg are the least corrupted among the member states in Europe.

corruption

Photo credits: Devin_Smith /photo on flickr/Foter/CC BY

When the global recession hit the European Union in 2009, the European states did not go through the hard phases of economic downturn all in the same way. Southern European countries such as Greece, Spain, Italy and Portugal were in particular exposed to the economic problems. These countries, based on the data of Eurobarometer survey, have among the highest levels of corruption within the union: 97% of respondents in Italy and Portugal and 99% in Greece consider corruption to be widespread in their countries, while 87% of Spaniards surveyed answered positively regarding the existence of corruption on the political stage.

The Vicious Circle of Corruption

After more than five years of deep recession, Greece is still struggling to implement structural reforms and austerity measures to end a long-lasting default crisis. Among many diverse factors, it is important to note that corruption might be a cornerstone in the chain of moral and economic miseries of this Balkan country.

Corruption

Evzones Group in Syntagma Square        Photo credit: GNU Free Documentation License , Creative Commons Attribution-ShareAlike 3.0 Unported (CC BY-SA 3.0)

In fact, Greek politicians consider tax evasion almost a national sport since it represents an annual loss of more than €30 billion for the country. In Greece it is still normal to encounter an anticorruption official accepting bribes, politician laundering money or plumbers getting anggy at you for asking a receipt. It is hard to grasp the reasons of such a behaviour in the times of deep Greek despair. Thanassis Cambanis, columnist for The Boston Globe and a fellow at The Century Foundation, in his report “from a country where everyone knows a thousand ways around the rules” tries to give a constructive reasoning behind this mentality. He states that the costs of paying taxes for Greeks are simply much larger than the benefits they get from the government. This kind of thinking triggers daily practices that actually prevent the government from collecting a reasonable amount of money to implement social benefits. Thus, this nurtures a vicious circle.

Some historians, on the other hand, see the roots of such a massive disrespect for economic and legal ethics coming from the Ottoman times, when tax evasion was considered to be a signal of heroism and fight towards the occupier. Yet even some pages of more recent history show how the incentives of cheating fostered. In 1981 the Greek socialistic party PASOK won the parliamentary election and simultaneously the country entered the European Union.

Corruption

Andreas Papandreou   Photo credit: PIAZZA del POPOLO / Foter / CC BY

The leader of PASOK – at the time Andreas Papandreou – expanded immensely the public sector, increased public spending and implemented policies to cure “historic injustices” in order to gain political support. Such reforms were implemented very easily as Greece was receiving large funding streams from Europe to help the country integrate into the Common Market.

Those factors decreased competition, responsibility, integrity and promoted the environment, where finding loopholes and manoeuvring around the law quid pro quo became popular and even a sign of strength.

How to Fight Corruption

In spite of corruption being a great obstacle for economic and social development, there are several universal methods to stop or at least to decrease the phenomenon. Firstly, by implementing institutional restraints on power by enforcing independent prosecution and establishing very efficient judiciary legislative oversight. Secondly, it is vital to increase political accountability by exposing parties financing, asset declaration and working on laws to prevent a conflict of interest. What is more, a competitive private sector is a very powerful tool to cope with the eroding effects of corruption. A competitive private sector increases employment, labour efficiency and work ethics, as well as serving as an instrument to eliminate monopolies and collaboration between politicians and private companies of interest. Finally, the active participation of people is, by far, the most vital way to fight corruption. If citizens start actively detract refraining from stealing from themselves and their posterity, this zero tolerance behaviour would bring fruitful results.

Hopefully, it will not take too long to see Greece in a bright light on newspaper pages as an exemplary country, which finally overcame its problems once and for all. Big changes may start from one petite action, a metro ticket purchased daily, a receipt gently asked from your florist or a nice explanation board on the type of ticket a tourist should buy to reach a relevant destination. Corruption, big at a glance, may become much smaller if dealt with one step at the time.

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Egle Buitvydaite

Egle Buitvydaite

Egle Buitvydaite hails from London, UK after having lived in several foreign countries prior her British immersion. She covers topics in Economics for The International Post Magazine and is passionate about theater, ballet, Japanese culture and running.