Greek parties in uproar over tax scandal before inquiry vote

ATHENS Thu Jan 17, 2013 11:17am EST

ATHENS Jan 17 (Reuters) - Greece's leftist opposition called on Thursday for two former finance ministers to be punished for failing to act on a list of potential tax evaders, hours before a parliamentary vote to decide who to investigate.

Parliament will vote later on whether former finance ministers George Papaconstantinou and Evangelos Venizelos as well as two former prime ministers must face an inquiry over the affair, which has rattled the fragile ruling coalition.

The "Lagarde list" of 2,000 Greeks with money stashed abroad has exploded into the latest political scandal in Greece, with many angry that successive governments failed to pursue those on the list while heaping austerity cuts on everyone else.

Tax evasion is a major problem in Greece, which tumbled into unsustainable debt by years of spending more than it brought in.

Twists and turns in the scandal - including revelations that the list was misplaced, locked away in a cabinet, copied and tampered with - have further tainted a political class widely seen as corrupt and to blame for the nation's financial crisis.

Only the motion to investigate Papaconstantinou - expelled from the socialist PASOK party after names of three of his relatives were deleted from the list - is expected to pass since it is backed by Prime Minister Antonis Samaras's government.

Samaras has resisted calls by the opposition SYRIZA party to probe his fellow coalition leader Venizelos, who was given the list when he succeeded Papaconstantinou in the finance minister post but took no action on it.

"The Lagarde list case brings to the fore the hypocrisy of those who were at the helm of the country in the most critical period," SYRIZA deputy Zoe Konstantontopoulou said. "They kept the file a well-kept secret at a time when they raided wages and pensions, claiming that they had no other choice."

A motion to investigate former prime ministers Lucas Papademos, a technocrat and former European Central Bank deputy president, and George Papandreou, of PASOK, has failed to attract broader support since being proposed by the right-wing Independent Greeks and far-right Golden Dawn parties.

MUDDY WATERS

The Lagarde list, named after former French finance minister Christine Lagarde who is now International Monetary Fund president, was first given to Athens by the French government in 2010. Little was heard of it until its existence was revealed in September last year.

It then quickly became a political hot potato, with Greek authorities coming under fire for arresting a magazine editor who published the list. He was later cleared of charges of violating privacy laws.

The deepening scandal around the list threatens to undermine Samaras's government, which has secured aid from foreign lenders to avert a national bankruptcy but remains beset with internal rifts over a painful austerity program the country must follow.

Samaras's refusal to back a probe into Venizelos has already cost the ruling coalition the support of three lawmakers - two from the small Democratic Left party were expelled for backing such a probe while one PASOK lawmaker resigned in protest.

That leaves Samaras's ruling coalition with the support of just 163 deputies in the 300-seat parliament, but still with more than the 151 deputies needed to force an investigation.

Papaconstantinou, a U.S. and British-educated economist who served under Papandreou, has denied tampering with the list, and says he is the victim of an attempt to incriminate him.

"If I wanted to do such tampering, would I have done it in a way that implicates me so blatantly?" he told parliament on Thursday ahead of the vote.

"Could I not have, for example, removed not just the three names of my relatives but 10, 20, 50 more in order to muddy the waters? Names that would implicate others and not just myself?"

He denied he had lost a CD with the list, saying: "I gave it to my secretary to keep it safe and I don't know where it is today - if it's somewhere in the ministry, or if something else happened."