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Kerin Hope — Athens
They are Greece’s best-known tycoons, admired and loathed in equal measure for their vast wealth and deep political connections. While ordinary Greeks call them “diaplekomenoi” (the entangled ones) or “davatzides” (pimps), economists call them oligarchs because of their grip on the country’s business life.
However they are described, their role in Greek politics and society is under scrutiny ahead of this month’s election.
The far-left Syriza party, which is tipped to win a snap general election on January 25, has declared war on the oligarchs if it comes to power. George Stathakis, the party’s shadow development minister, told the Financial Times last week that Syriza would end the practice of governments handing out television licences for free to their political friends and review contentious privatisation sales. Tackling the oligarchs’ grip on the economy “will be a priority” he said.
Such comments already mark a change from form in Greece, where the oligarchs’ influence has long been felt but seldom discussed — at least publicly.
“The real enemy to market competition in Greece is the oligarchy, but it’s a taboo subject — politicians don’t discuss it and the media don’t write about it,” says Aristides Hatzis, a professor of law and economics at Athens University.
One reason is that Greece’s private television channels along with influential news websites and daily newspapers are in many instances controlled by oligarchs with editorial influence.
A US embassy cable released by WikiLeaks said: “Greece’s private media outlets are owned by a small group of people who have made or inherited fortunes . . . and who are related by blood, marriage or adultery to political and government officials and/or other media and business magnates.”
Taming such figures will not be easy: No member of the close-knit oligarch community has yet been toppled by Greece’s seven-year economic crisis, even though their media outlets are believed by some analysts to have racked up almost €2bn in unserviced loans from local banks as advertising revenues collapsed and handouts from state-controlled companies disappeared.
Still, they appear to have been weakened by the country’s severe recession and the fiscal constraints imposed by international creditors.
“They’re still powerful but their activities have been affected by recent efforts to clamp down on tax avoidance, for example through offshore companies,” Mr Hatzis said.
The oligarchs’ political influence also stands to suffer when new legislation requiring political parties to produce audited accounts is implemented. One Athens-based economist, who declined to be identified, said it would be harder in future for any who funded politicians to keep them “on the payroll”.
Greece has a long tradition of businesses relying on political contacts to push through deals — and of politicians seeking handouts from business to boost their electoral chances.
Mr Hatzis calls it “a small country where trust is lacking and the rule of law is not well enforced.”
The scale of such dealing grew in the 1990s as Greece’s economy took off on the back of market liberalisation required by the EU and increased funding from Brussels for infrastructure and technology projects.
Big contracts for EU-backed projects were shared among a small group of bidders. But occasional dust-ups over the largesse could spill into politics, sometimes with disastrous consequences.
In one case, Constantine Mitsotakis, a reformist prime minister, blamed Socrates Kokkalis, the founder of Intracom, a telecoms equipment producer, for instigating the fall of his government in 1993 over the prospective sale of Greece’s state telecoms company OTE to a French group that would have used its own equipment supplier — a charge Mr Kokkalis denied.
Intracom continued to sell equipment worth billions of euros to OTE, while its sister company Intralot provided automated gaming systems for OPAP, the state gambling monopoly.
Mr Kokkalis’s influence expanded through the launch of a popular radio station run by his wife and the acquisition of Greece’s top football team, Olympiakos.
George Papandreou, the former socialist premier who resigned in 2011, also claimed he was brought down by oligarchs after a finance ministry campaign to tackle widespread fuel smuggling revealed a Balkanwide scam that cost Greece €3bn a year in lost taxes.
“Several prominent bankers and industrialists were among those determined to see me go,” he told the FT.
The current generation of oligarchs, already well past normal retirement age, are gradually handing over their day-to-day operations to younger family members while retaining their power over politicians through handouts to finance their election campaigns and arranging access to television coverage.
Costas Bacouris, head of the Greek arm of Transparency International, the anti-sleaze watchdog, believes that — as ever — the oligarchs will try to adapt to changing circumstances.
“They continue to wield influence but they’re taking a wait-and-see position with regard to future political developments,” Mr Bacouris says. “My understanding is that a number of them have been making contact with Syriza but it’s not yet clear with what outcome.”
Top oligarchs
Vardis Vardinoyannis: the 81-year-old patriarch of a Cretan family that controls MotorOil Hellas, Greece’s second-largest oil refinery, as well as a tanker fleet, a bunkering operation on Crete, an oil and gas exploration company and a five-star Athens hotel. The Vardinoyannis group controls one private television station, Star, and holds a minority stake in another, Mega Channel.
Michalis Sallas: the 64-year-old chairman of Piraeus Bank, which has become the largest Greek lender by taking over the healthy assets of two failed Cypriot banks and a Greek state-controlled bank during the crisis. A founding member of the PanHellenic Socialist Movement (Pasok) and former econometrics professor at Athens Panteios university, he has kept close ties since the 1980s with successive Greek prime ministers.
Spiros Latsis: the 69-year-old son of John Latsis, a London-based shipping billionaire who funded the UK Conservative party. The Latsis group is a partner with the Greek state in Hellenic Petroleum, the country’s biggest oil refiner. Last year Lamda Developments, its property arm, won a concession to develop Hellenikon, the coastal site of the former Athens International Airport. Lamda and its partners, Fosun of China and the Abu Dhabi sovereign wealth fund, made the only binding offer for the €5bn project, which a Syriza-led government may potentially cancel.
George Bobolas: the 86-year-old founder of Ellaktor, Greece’s leading construction company, who was accused by journalists and rivals in the 1980s of being a Soviet “agent of influence”. Mr Bobolas has always denied the allegation. The opposition Syriza party says it will review Ellaktor’s share of income from Attiki Odos, a profitable toll road to Athens airport if it comes to power. The Bobolas group is a minority shareholder in Mega Channel and controls Ethnos, a lossmaking daily newspaper.
Dimitris Copelouzos: aged 64, Gazprom’s representative in Greece since the 1980s and founder of Copelouzos group, an energy and construction specialist. The group recently teamed up with the German airport operator Fraport to make the winning €1.2bn bid for a concession to operate 14 regional Greek airports that would drive the country’s tourist development over the next decade. Syriza has warned parliament may not ratify the deal.
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