EditParty financing in Greece: the unseen “financial immunity” of New Democracy and PASOK
The two historically entrenched political parties owe more than one billion euros, most comes from bank loans
At a time when the fiscal discipline is presented as a national obligation and the citizen is called upon every day to cope with increasing economic pressures, the financial balance sheets of two of the most historically entrenched Greek political parties – the New Democracy and the PASOK – reveal a different reality: that of chronic over-indebtedness, the lack of accountability and institutional inaction in the face of a phenomenon that in any other European country would constitute a first-rate scandal.
The data for the financial year 2024, which were published in the middle of a summer heatwave and with little publicity – cause dizziness: only New Democracy and PASOK owe a total of more than one billion euros, of which 1.03 billion comes from bank loans.
Financial derailment
According to its balance sheet New Democracy, the party closed in 2024 with total debts EUR 541.8 million, increased by EUR 54 million compared to 2023. Most of this amount – EUR 530.9 million – comes from loans to banking institutions. Expenses far exceeded revenues: the Southwest received EUR 18,4 million but spent EUR 71,1 million – almost 144.000 euros more per day – a pattern of economic planning similar to a Latin American state during the period of state bankruptcies.
In PASOK, the picture is no different. With total debts EUR 507 million, of which EUR 502.2 million also relate to bank loans, and with expenses that reached EUR 58 million – of which EUR 57 million were directed to interest and bank charges – it becomes clear that this is a economically inert scheme, which survives thanks to state funding and informal tolerance from the banking system.
It is noteworthy that both the PASOK – Movement for Change, despite the lower debt of EUR 287 000, continues to collect separate state funding, creating a framework of financial duplication that raises questions transparency and ethics.
Institutional tolerance or complicity?
Despite repeated questions in Parliament – such as the one from the MP of SYRIZA Harry Mamoulakis – and the invocation of the need for a stricter regulatory framework in party funding, the government and the relevant bodies – from the Ministries of Interior and Finance to the Bank of Greece – demonstrate systematic unwillingness to take responsibility.
No provision is made no ceiling the degree of dependence of the parties on debt. There is no no viability check or budget deficit per party, nor a commitment to gradual consolidation. These debts are not reported, are not regulated and are not refinanced on market terms. On the contrary, recycled with annual increases of thousands of euros in interest, but which do not have any legal or banking implications, while citizens are losing their first home for debts of a few thousand euros.
European benchmarking: the Greek exception
Similar situations are almost non-existent in the rest of Europe. In Germany, state funding of the parties depends directly on the number of votes and requires detailed revenue and expenditure report per year, which is subject to strict control by the Federal Audit Office. The CDU and the SPD, the two historical parties, do not have accumulated debts that exceed their assets and these are fully regulated.
At France, the Fiscal Court controls both the acceptance of bank loans as well as the their repayment, while the deficit threshold per election is strict. The Republicans (Les Républicains), after the crisis of 2017, have moved to a financial recovery plan, layoffs, and drastic spending cuts.
Even in Italy, where cases of party mismanagement had been recorded in the past, after the 2013 reforms the public money to the parties was abolished and replaced by tax relief for private donors, with full transparency in the flow of funding.
In countries such as Netherlands, Austria or the Scandinavian countries, the possibility of a party having a debt of more than half a billion euros would be considered not only economic suicide, but also an institutional challenge – and probably criminal offence whether there was evidence of fraud or systematic tax evasion.
The democratic cost
The problem is not just accounting – it is deeply political and systemic. The Greek immunity of parties against any notion of sound financial management undermines the very authority of the democratic system. How can a party that does not pay its debts enact laws for the tax compliance? How can such a party talk about “growth” and “sustainability” while it borrow swithout limit and spends without control?
The insistence on perpetuating this model – no dialogue, no reforms, no accountability – reinforces the democratic deficit and cultivates the social mistrust to the institutions. The lack of political costs for those responsible, as well as the absence of legal consistency for the debts, blurs the line between rule of law and in discretionary power.
Prospects and needs
The comparison with the rest of Europe highlights the Greek anomaly as an exception to the rule of good party management. Greece needs immediately:
- The establishment of a borrowing ceiling and maximum deficit per party.
- Prohibition of further State funding to parties that do not pay their debts.
- Consolidation of party structures sharing double government aid.
- Transparency in “other expenses” and an annual analysis of bank liabilities.
- Revision of the control framework by the Bank of Greece and committees of the House.
Without them, the country will continue to be an island of Soviet-style party finance feudalism in the EU – with the parties acting above the law and the citizens unknowingly paying the price of indebted democracy.
The original version of this commentary was published by EUalive’s partner IBNA agency.
Disclaimer: EUalive doesn’t necessarily share the opinion of the guest authors and is open to publishing other views on the same topic.
Caption: File photo. Leader of New Democracy political party Kyriakos Mitsotakis (C) greets supporters after the announcement of the first results in the Greek general elections, at the party’s headquarters, in Athens, Greece, 25 June 2023. EPA/ALEXANDROS VLACHOS
Updated: August 5, 2025 - 09:46
