A deterrent factor for legislative regulation by the Government to abolish distortions through the granting of multiple pensions is the recent opinion of the Attorney General, the Audit Office asserts.
It even calls on the Parliament to proceed with the examination of the legislative texts prepared by the Audit Office and which were submitted last November, so that the matter can be regulated by the initiative of the legislative body.
The texts prepared by the Audit Office have been legislatively processed by the services of the Parliament.
“If the President of the Republic receives an opinion from the Attorney General that the laws (i.e., those to be voted on by the Parliament) are unconstitutional, they will be sent to the Supreme Constitutional Court, which is the only competent authority to decide,” the Service adds in a report released yesterday by the General Ledger.
The report refers to the request of Auditor General Odysseas Michaelides to suspend the payment of multiple pensions to state officials, as well as to the response of the General Ledger, which invokes the opinion of the Legal Service, according to which the Ledger correctly terminated the suspension of the payment of the officials’ pension.
In its report, the Audit Office emphasizes that “given the recent opinion of the Attorney General, we believe that the Government will never be able to submit bills that could abolish distortions in the issue of multiple pensions.”
As the Auditor General points out, the Legal Service advised the General Ledger to make payments in violation of the explicit provision of the legislation to suspend the pension for the period an official assumes another position, because the Attorney General himself decided to declare the law unconstitutional.
Mr. Michaelides considers these positions unprecedented. “Even this suspension (or not) is applied selectively.
The pension of the former President of the Parliament was suspended in 2021, as soon as he was re-elected as an MP, but the pension of the Minister of Finance was not suspended when he was reappointed as a minister,” he adds.
Additionally, the report emphasizes that, in a Rule of Law, if the administration believed that the law was unconstitutional, it should have proceeded with its abolition. It reiterates that the payment of pensions should have been suspended, arguing that their payment is blatantly and inherently illegal.
The Audit Office also identifies problems with Interest Subsidy Schemes for new business and housing loans. Among other things, it found that the required scrutiny was not carried out on the schemes.
The Office found that, in all cases, the provisions were not complied with and/or there was no inspection of the compliance with all the provisions of the “Interest Subsidy Scheme for new business loans” and the “Interest Subsidy Scheme for new housing loans,” which were implemented as part of measures to support the economy in dealing with the effects of the coronavirus.
For the Business Loan Subsidy Scheme, the Office found that a provision was applied prior to approval by the Council of Ministers and the European Commission. It also found that a specific company was included in the Business Loan Scheme, approved by a bank on July 6, 2020, and granted through the European Investment Bank (EIB), whose interest rate was determined as the sum of the Euribor with a three-month tenor, plus the margin set by the bank.
According to the Scheme in force at the date of approval of the specific loan, the Euribor tenor should have been six months. After the findings of the Office, the General Ledger confirmed that it did not conduct an audit to ensure compliance with the provision of the Schemes for the non-subsidization of interest from another Government Scheme.
There were also cases of businesses judged to be eligible, while they did not appear to meet all the criteria of the Scheme or received a larger subsidy than they should have based on the criteria.
For the Housing Loan Subsidy Scheme, it was found that loans were granted to applicants who had not settled their tax obligations.
