Friday, April 16, 2010

Kraut stuffed fakelaki?

Sounds vaguely like a Euro-fusion Greek dish, and indeed it sorta is. It's the Germans, after all, who are up the Greek without a bail out.

Tragic Flaw: Graft Feeds Greek Crisis
Fakelaki is the Greek for "little envelopes," the bribes that affect everyone from hospital patients to fishmongers. Rousfeti means expensive political favors, which pervade everything from hiring teachers to property deals with Greek Orthodox monks.

Together, these traditions of corruption and cronyism have produced a state that is both bloated and malnourished, and a crisis of confidence that is shaking all of Europe.

A study to be published in coming weeks by the Washington-based Brookings Institution finds that bribery, patronage and other public corruption are major contributors to the country's ballooning debt, depriving the Greek state each year of the equivalent of at least 8% of its gross domestic product, or more than €20 billion (about $27 billion).

Last year, 13.5% of Greek households paid a bribe, €1,355 on average, according to a Transparency International survey published last month. Ordinary citizens hand out cash-filled envelopes to get driver's licenses, doctor's appointments and building permits, or to reduce their tax bills, according to the organization's Greek chapter.

"The core of the problem is that we don't have a culture of civic society," says Stavros Katsios, a professor at Greece's Ionian University who specializes in economic crime. "In Greece, complying with the rules is a matter of dishonor. They call you stupid if you follow the rules."

One-quarter of all taxes owed in Greece aren't paid, says Friedrich Schneider, an economist at Austria's Linz University who studies tax evasion around the world. He estimates that around one-third of that is due to bribery. "You split your tax payment with the tax inspectors, and you get a discount," he says.

Hiring to public-administration jobs surged last year as the right-leaning government struggled to restore its popularity in the face of scandals and economic slowdown. In the month before the fall election, the government added 27,000 people to the public payroll. Many had no position to fill, and not even an office to go to, according to finance ministry officials.

Government officials say the health-care system is a hotbed of corrupt procurement.

It's an article choke a bloke full with corruption hard to swallow. Have a read if you can get into the WSJ site.

How do you like your Greek salad?




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