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Why Fighting Oligarchs Is a

Bad Idea18 JAN 7, 2015 9:08 AM ESTBy Leonid Bershidsky

The top economic spokesman for the leftist Greek party Syriza,which leads the polls ahead of the Jan. 25 election, says one of theparty's goals is to crack down on the nation's oligarchs . Red cing theo tsized role of politically connected magnates, George Stathakisarg es, will allow smaller, more honest ! sinesses to !e morecompetiti"e.

Syriza's implied threat to !reak apart the e ro c rrency nion wasscary eno gh. # t Stathakis's rhetoric is at least as worrisome. $nyregime that wants to %ght the oligarchs means to increasego"ernment interference in the economy && to s ch an e tent that itwill end p replacing old oligarchs with new ones.

()ligarch,( a word of Greek origin, has long denoted a mem!er of anoligarchy, a small gro p that r ns a co ntry or an organization. *nthe + -s, howe"er, it ac ired a second meaning/ to ote the) ford 0nglish 1ictionary, ( 0specially in R ssia3 a "ery rich! sinessman with a great deal of political in4 ence.( That has!ecome the dominant meaning. *n the ollins 0nglish 1ictionary,fo r of the %"e sage e amples for (oligarch( refer to R ssia.

*nside R ssia, the word was sed in this sense for the %rst time on J ne 2, + 5, in a newspaper article a!o t a once&in4 ential and nowall ! t forgotten tycoon, )leg #oiko. *n this instance, the word wasapplied to the tenacio s cli e of !ankers who !ecame !illionaires in

+ 5 and + 6 after !eing allowed to pri"atize R ssia's !estind strial assets for a tiny fraction of their tr e cost && in reward for!acking 7resident #oris 8eltsin's re&election. These g ys did, indeed,constit te an oligarchy/ * remem!er one of them e plaining his "astpolitical in4 ence !y saying, (* am 9 percent of the R ssian G17.(

Then, on :e!. 2;, 2---, o clan, no oligarch sho ld !e close to the regional orfederal a thorities && they m st !e e idistant from power.

http://www.bloombergview.com/contributors/leonid-bershidskyhttp://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_04/01/2015_545938http://www.ft.com/intl/cms/s/0/b0c41cd2-95bb-11e4-be7d-00144feabdc0.html#axzz3O7aGcObDhttp://www.oxforddictionaries.com/definition/english/oligarchhttp://goo.gl/mc2Yxfhttp://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_04/01/2015_545938http://www.ft.com/intl/cms/s/0/b0c41cd2-95bb-11e4-be7d-00144feabdc0.html#axzz3O7aGcObDhttp://www.oxforddictionaries.com/definition/english/oligarchhttp://goo.gl/mc2Yxfhttp://www.bloombergview.com/contributors/leonid-bershidsky

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(0 idistance( promptly !ecame a meme in R ssia, tho gh it didn'tgain s ch c rrency o tside the co ntry. $t %rst it was sedsarcastically/ The same !illionaires still controlled the co ntry'sreso rce and %nancial wealth. # t then something strange startedhappening. :irst,

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So far, Ckraine's war on its oligarchs has !een limited to attempts !ysome rich Ckrainians to s eeze others who made wrong political!ets d ring the co ntry's (re"ol tion of dignity( last year. ?etals kingRinat $khmeto", the co ntry's richest man, and chemical and energymagnate 1mitri :irtash are nder partic lar press re. 7oroshenko's! sinesses, !y contrast, are doing great/ Dis !ank increased itsassets !y a!o t 5- percent in the %rst nine months of 2-+9. $nddespite all the talk of dereg lation, go"ernment e pendit re is set toincrease this year, creating fertile gro nd for more, not less,cronyism.

Syriza's plan to go after oligarchs incl des ha"ing them compete formedia licenses again, in"estigating their go"ernment contracts forroad constr ction, and cracking down on ta e"asion thro gh

oEshore operations. These are all elements of increased go"ernmentcontrol o"er ! siness. They can s cceed only if Syriza politiciansand oFcials aren't s scepti!le to corr ption. =here old oligarchs failto get traction, new ones ine"ita!ly learn to game the system andgrease the wheels.

The only eEecti"e way to %ght oligarchies is to shrink go"ernment. *nGreece, p !lic spending rose to 5 .2 percent of G17 last year, from5B.; percent in 2-+B. The co ntry is going the wrong way, andSyriza's looming war on oligarchs will only take it f rther down that

path.

To contact the a thor on this story/eonid #ershidsky at l!ershidskyH!loom!erg.net

To contact the editor on this story/?ary 1 enwald at md enwaldH!loom!erg.net

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