PASOK has a big problem. In 2010, French authorities were conducting a tax investigation and discovered over 2,000 accounts owned by Greek citizens at the HSBC private bank in Switzerland. French Finance Minister Christine Lagarde sent a CD full of the names and account information to the Greek finance minister who ignored it.
His successor at the Finance Ministry, Evangelos Venizelos, also sat on his hands claiming that the CD had been “mislaid.” Today, Venizelos is the leader of PASOK whose votes are essential in upcoming parliamentary vote for labor market reforms. He is losing the support of his party.
The Greek people are outraged. Their leaders have asked them to make more and more sacrifices while the economy sinks deeper and deeper into depression. Meanwhile, the rich evade taxes with impunity.
The only person who has been brought to trial over the scandal is the brave journalist who published the list of names in his magazine Hot Docs. Fortunately, justice was served, and he was acquitted.
The audacity of the Greek government to file charges on this journalist has not been lost on the Greeks, nor has Venizelos’ involvement with the cover up. PASOK is in danger of imploding, and the Greek government will fall without its support.
Syriza would likely form a new government, and its leader has vowed to renegotiate the entire bailout. Greece is the center of the euro crisis again. If the labor market reforms do not pass Wednesday, the crisis will come to a head where it all started.
As we have seen with the euro crisis, there is a seemingly endless road to kick the can down. This latest squabble will turn out to be a tempest in a teapot. The measures will barely pass, and we can begin worrying about Spain for the next two weeks.