Greek government embroiled in EU farming funds scandal

The European Public Prosecutor’s Office (EPPO) is investigating dozens of cases in which those who have received European Commission funds for farming have made false claims about the farming work they undertook, the land they own or lease, or the industry they’re in. The ongoing investigation is focused on, as the EPPO states, “an alleged organised fraud scheme involving agricultural funds and corruption involving public officials of the Greek Payment and Control Agency for Guidance and Guarantee Community Aids (OPEKEPE).”

On 27 June, Greek Prime Minister Kyriakos Mitsotakis observed a mass resignation of senior officials whose names appeared in a dossier from the European prosecutor that implicated them in the scheme to defraud the EU. Those officials who resigned were Migration Minister Makis Voridis, Deputy Foreign Minister Tasos Chatzivasileiou, Deputy Minister of Rural Development Dionysis Stamenitis, Deputy Minister of Digital Governance Christos Boukoros, and Secretary General for Rural Development and Food Giorgos Stratakos.

The resignations and a hefty fine hardly signal that this is the end of problems facing Mitsotakis, however, with former ministers also implicated “in criminal offences” per a 3,000-page file provided by the EPPO to the Greek parliament on 19 June. Those implicated are Makis Voridis, who was agriculture minister from 2021 to 2023, and Lefteris Avgenakis, agriculture minister from 2023 to 2024.

The Prime Minister is attempting to stop further investigations using Article 86 of the Greek Constitution, which holds that only the Hellenic Parliament can investigate and prosecute current or former members of the Greek government for criminal offences committed while in office. While the EPPO has the capacity to investigate fraud involving EU funds, it is hamstrung by Greece’s constitutional mandate to investigate its own officials, or not. In a press statement from the EPPO, it responded: “The EPPO had to comply with the applicable national law, which forbids the EPPO to investigate and prosecute serving or former members of the Greek government. However, in our view, this limits the EPPO’s competence, in breach of the EPPO regulation. As this is a matter of compatibility between EU and national law, the EPPO has already reported this to the European Commission. All persons concerned are presumed innocent until proven guilty in the competent Greek courts of law.”

The full 3,000-page dossier is available to current members of Parliament, but they are legally bound to keep it private. Included in that file – according to investigations by Politico – are allegations that former ministers Avgenakis and Voridis have misappropriated EU funds, which they reject. The case file also names 13 ministers from the ruling New Democracy (ND), a minister from the opposition Pasok, and a minister from the Syriza party, current regional officials and former agency executives.

The EPPO conducted wiretaps on the phones of OPEKEPE officials, which uncovered conversations between high-ranking officials discussing how to remove European prosecutors from the investigation. Former OPEKEPE presidents have testified that they attempted to alert the former agriculture ministers of fraudulent payments as far back as 2020, resulting in the dismissal of both. Grigoris Varras and Evangelos Simandrakos claim the ministers pressured them to make the payments, purporting to Politico’s knowledge of the file.

Too little, too late

On 11 June, the European Commission ordered Athens to forfeit €392.2 million ($701.6 million) in EU funding as a result of suspected and substantial fraud between 2016 and 2023. OPEKEPE is also accused of making payments without adequate audits or on-site inspections. In a gesture that falls short of appeasing the EU prosecutors, the Greek government said it will shut down OPEKEPE by 2026 and the Independent Authority for Public Revenues will take over the management of farm payments.

The forfeited amount takes into account the European Commission’s imposition of a flat-rate correction of 5 per cent on all Greek direct subsidies, and 10 per cent correction upon the young farmer schemes from 2018 to 2020. Annual penalties for non-compliance with EU regulation include €79 million and €76 million for 2021 and 2022 respectively, which were delivered via direct payments, small farmer schemes, eco-schemes and voluntary coupled support measures.

The €1.9 billion ($3.4 billion) in direct payments from the EU that Greece had been assuming would boost its economy in 2026 has taken a significant hit from the imposed fines. In March, the General Court of the European Union dismissed a Greek appeal against sanctions of a similar nature, upholding the European Commission’s findings and ordering Greece to pay court costs.

Nearly 50 years of fiscal mismanagement

Greece has struggled with systemic financial mismanagement over nearly two decades at least. The 2008 financial crisis led to emergency reforms and austerity measures resulting in food shortages, unemployment, and poverty conditions for many. It only officially ended in 2018. But, the reality of Greek’s fiscal problems goes back several more decades, according to the Council of Foreign Relations, which dates “Greece’s chronic fiscal mismanagement and resulting debt crisis” back to 1974. That year, Greece re-established democratic rule after the military junta collapsed. It had seized power in 1967.

In 2001, Greece managed to disguise a significant budget deficit and debt level above 100 percent of its GDP in order to join the eurozone, adopting the euro as its currency. In 2010, the International Monetary Fund (IMF) and EU agreed to a three-year period of loans to Greece of 110 billion euros under the conditions of strict austerity measures, including tax hikes and public spending cuts. Three bailouts followed, resulting in Greece owing over $USD330 billion ($504.4 million) to the EU and IMF by 2018.

Article 86, the contentious element in the constitution

Chapter 2 of the Greek Constitution, Articles 84 to 86 concerns “Relations between Parliament and the Government”. It states that “Only the Parliament has the power to prosecute serving or former members of the Cabinet or Undersecretaries for criminal offences that they committed during the discharge of their duties, as specified by law. The institution of specific ministerial offences is prohibited.

“Prosecution, investigation, preliminary investigation or preliminary examination against the persons specified in paragraph I for the above mentioned offences shall not be permitted without a prior resolution of Parliament in accordance with paragraph 3. If in the course of another investigation, preliminary investigation, preliminary examination or administrative inquiry, evidence should arise which relates to the persons and offences of the preceding paragraph, these shall be promptly forwarded to Parliament by the person conducting the investigation, preliminary examination or inquiry.”

At least 30 Members of Parliament must move for a motion for prosecution, which – if successful – would result in a special parliamentary committee being assembled to conduct a preliminary examination. Even in this situation, “the Parliament may at any time revoke its resolution or suspend the prosecution, preliminary proceedings or main proceedings, according to the procedure and majority provided in the first section of this paragraph.”

The present government, the New Democracy, have been accused of violating the constitution as recently as 2023 when former minister Christos Triantopoulos was the target of opposition party PASOK. PASOK proposed a special parliamentary committee to investigate Triantopoulos for his supposed breach of duty in the handling of the 2023 Tempe train crash disaster site.

A parliamentary committee was formed to conduct a preliminary investigation, which the plenary of the Parliament could then refer to in order to decide whether or not to pursue criminal prosecution before the Special Court.

Professor of constitutional law at the Aristotle University of Thessaloniki Evangelos Venizelos is also the former deputy prime minister, foreign, defence and finance minister, and a former leader of PASOK. In an opinion for Ekathimerini on April 11, he gave an in-depth explanation of how Article 86 has been misused by successive governments to prosecute former ministers of the opposition.

He writes: “The interpretation of Article 86 – just like any constitutional provision – cannot be ahistorical. The criminal liability of ministers usually functions as the criminal liability of the opposition for what they did as a previous government. A government majority is rarely forced to refer its own officials to the Special Court under the pressure of public opinion. For example, former transport minister Kostas Karamanlis was not referred to justice over the 717 contract relating to the Tempe train disaster. Meanwhile, the main investigation into the collision is still ongoing and we do not know whether other files will be forwarded to Parliament.”

Public protests relating to the lack of investigation into the deaths of 57 passengers are ongoing. Despite promises by the Prime Minister that constitutional reform is a central pillar of their campaign leading up to elections before 25 July 2027, the odds are against this occurring. For articles of the Constitution to be sent for revision to the next parliament, the current chamber must supply 180 votes, which would require not only the present government to vote in favour, but an additional 30 opposition MPs.

The family-run farms are the real victims

The real victims of this scandal are the legitimate agricultural workers and landowners in Greece. According to the European Commission’s Common Agricultural Policy (CAP) report, which is the basis for the funding, the Greek territory comprises 63 per cent rural areas, and 5.3 hectares of farming land. Of the 700,000 farms, most are small family-run operations.

Further, the farming sector employs approximately 400 000 people, which is especially meaningful for young people who bear the brunt of rural unemployment. Most of the farming land (70 per cent) is prone to – according to the European Commission review – “extreme slopes, low temperatures, dryness of soil, unfavourable soil texture, borderline areas, island regions which significantly affect farming”.

Without constitutional reform, and alignment with EU regulations, Greece and its farmers face a precarious future.