Tag Archives: Greece tax evasion

For sweet dreams, evasion and avoidance

I wrote an article earlier this week criticizing Christine Lagarde’s comments about Greece. My main objections were that she helped perpetuate the stereotype of all Greeks evading taxes, overlooked the International Monetary Fund’s role in the buildup to the Greek crisis and the way it was handled since 2009, and her belittling of the difficulties that some Greeks are facing due to the deteriorating situation in their country.

I have received a number of interesting responses, the vast majority of which have focused on the issue of tax evasion. Even the most blinkered nationalist or dogmatic ideologue could not fail to see that tax evasion has played a part in the Greek crisis. It undermined public finances and fed the anomie that pervaded much of public life over the past few decades.

However, I have noticed that some people consistently reject all attempts to place tax evasion within any context. It is difficult for them to accept that there are other, perhaps more important, factors — such as an uncompetitive and unproductive economy, an inability to export, a reliance on imports, a flawed euro entry and the selfishness and incompetence of the country’s political class and many of its people — which have led to Greece’s downfall.

Continue reading

A taxing issue for Greece

Greece’s tax collectors were told over the weekend that they would have to do a much better job this year at gathering overdue taxes. How much better? Almost 200 percent.

According to Skai TV, some 700 million euros was collected in 2011 by chasing down taxpayers that had run up debts. This year, inspectors will have to collect 2 billion euros as Greece tries to meet even tougher fiscal targets amid a deepening recession.

Preliminary figures showed that tax revenues were already 1 billion euros short of the government’s target in January alone, with VAT receipts showing a considerable drop. As consumption decreases, so do revenues, which makes it even more vital that any existing debts are settled.

Continue reading

Umbrella union: 10 myths about Greece and the crisis

Animated illustration by Manos Symeonakis

There is a wonderful short documentary doing the rounds on the Internet at the moment courtesy of The New York Times. Directed by Errol Morris, the film focuses on the presence of the so-called “Umbrella Man” at the assassination of US President John F. Kennedy. With the help of private detective and former philosophy professor Josiah Thompson, Morris paints the picture of the apparently sinister presence of a man holding a black umbrella on a sunny day in Dallas exactly at the point where Kennedy was shot.

However, Thompson goes on to point out that the Umbrella Man eventually came forward and explained that he was holding the umbrella as a protest against the appeasement policy of JFK’s father, Joseph P. Kennedy, when he was US ambassador to Britain before the Second World War. The umbrella was a visual reference to the British prime minister at the time, Neville Chamberlain, who also carried one.

Continue reading

Dodging taxes or dodging the issue?

You know it’s August when journalists work themselves into a lather over a tax-dodging astrologist, as they did earlier this month. Granted, this particular Greek stargazer had allegedly hoarded some 4 million euros away from the prying eyes of tax inspectors. But the real news was that he managed to earn so much offering such a bad service. After all, if he were any good at predicting the future, he would have seen the taxman coming.

The snaring of an astrologer is usually about as titillating as tax-related matters can get, but it’s been an action-packed few weeks for members of the financial crimes squad (SDOE) and the newly formed Financial Police. They nabbed academics at the University of Ioannina who allegedly denied state coffers 700,000 euros, they caught 31 tourism-related businesses hiding their profits and the new hotline for citizens to register suspicions of tax evasion has reportedly been doing roaring business.

Continue reading

Memorandum II: The sequel – Dude, where’s my state?

Illustration by Manos Symeonakis

As Greece draws breath after voting for a new package of austerity measures likely to pave the way for another loan agreement with the European Union and the International Monetary Fund, this might be an opportune moment to identify one of the key faults with the first memorandum signed last year. Because, like a Hollywood sequel which follows a dire original, Memorandum II is likely to make us want to look away in horror.

There is plenty in the medium-term fiscal plan, or MTFP as it’s known in sequel speak, about reducing public spending. Greece plans to save more than 14 billion euros by 2015. This means, among other things, that the public sector wage bill will be cut by 770 million euros this year, 600 millon in 2012, 448 million in 2013, 300 million in 2014 and 71 million in 2015.

Continue reading

Greece, land of pain and joy

Illustration by Manos Symeonakis

There are rare moments when a thread of togetherness winds its way through a country to lift its everyday burdens. Sometimes, these moments are born from political, sporting or other types of victories. But victories tend to bring out the worst as well as the best in people. It’s usually moments of grief or sadness that stoke the purest of emotions, creating a fleeting sense of community before it’s sucked into the morass of daily stresses and strains.

Greece experienced such a moment last Sunday when the death of singer-songwriter and musician Nikos Papazoglou was announced. He was an unassuming man who made rare public appearances and dodged the media spotlight. The reaction to his death was a reflection of people’s love for his pure and passionate music, but it was also a sign of respect for Papazoglou the human being: as an artist he shunned commercialism and stayed true to his values and as a man he remained humble and generous despite his fame.

Continue reading

Democracy in pieces

Illustration by Manos Symeonakis

In ancient Egypt they used ostraka – shards of pottery or stone – to record tax receipts. In ancient Greece they used them to record the name of a person who deserved to be exiled from Athens. These two ancient customs fused on Monday when Deputy Culture and Tourism Minister Angela Gerekou was banished from the government after it emerged that her husband owed more than 5 million euros in unpaid taxes.

The demise of Gerekou and her husband, aging popular singer Tolis Voskopoulos, is, in fact, not an ancient Greek drama but a very modern one. It has many of the elements that can be found percolating in Greece’s soft underbelly – the stardust of a music icon, the allure of a beautiful actress, a family dispute, missing cash and political intrigue.

For Voskopoulos, this week’s developments dealt a deathblow to a fading career and damaged reputation. During his heyday in the 1960s and 70s, he was such a star that if Greece had its own version of Bollywood, he would have been its sacred cow. A poor boy made good thanks to his ability to sing songs of pain and love, and act in maudlin melodramas, he suffered a series of failed marriages that drained his personal finances as the entertainment world began to pass him by.

Gerekou, who once posed for the Greek edition of Playboy magazine, was left embarrassingly exposed by the revelations that Voskopoulos had failed to pay an outstanding tax bill of 5.5 million euros. In another political era, under different circumstances, Gerekou’s job would not have been on the line. But, due to the economic crisis, we live in different times and the government’s apparent determination to clamp down on tax evasion meant Gerekou’s position was untenable. PASOK could not justify publishing the names of doctors yet to be convicted of tax evasion, as it did last week, when it was public knowledge that a minister’s husband had not paid his own dues.

Unlike the ancient persona non grata, Gerekou did not wait to be ostracized. By resigning, she recovered a modicum of dignity from a sad tale that goes to the heart of the political dilemma facing Greece. What is on the face of it a personal misfortune reflects, in a social and political landscape being reshaped by the crisis, the wider questions being asked about what behavior Greeks should accept from their politicians and how much accountability they should demand of them.

In their various ways, all the parties have recognized that steps must be taken with the electorate to rebuild the bonds of trust, which have been bent beyond recognition by the realization that the political system has failed Greece so spectacularly for so many years. The government has already started putting together proposals to ensure that politicians are no longer an unfairly protected breed. These include stricter checks on MPs finances and measures to make ministers more accountable. Justice Minister Haris Kastanidis has suggested changing the interpretation of the statute of limitations to make it more difficult for ministers to dodge prosecution for their actions.

All of this would be welcome but is not enough for Greece to truly hit the reset button. Much more radical changes are needed. They should include withdrawing politicians’ anachronistic immunity from prosecution. If politicians really want to win people’s faith, they have to be prepared to face up to the consequences of their actions.

There also needs to be a period of catharsis in Greek politics. The government has intimated it might launch an investigation into the handling of the economy during previous years. For it to be effective, it would have to span the period when PASOK was in power as well, not just New Democracy. And, rather than turning into a witch hunt, it should take the form of a truth and reconciliation process whereby offenders would ask for an amnesty in return for speaking openly. Restorative justice, rather than a lengthy legal process – which would lead to only some, if any, of those responsible for the country’s plight receiving sentences – is the best way for Greece to draw a line under yesterday’s failures, learn from its mistakes and then let go of the past.

Any attempt to appease the public, to curry favor with voters in the short-term in the hope that time will eventually dull the pain of what has happened would be disastrous and a complete abdication of responsibility. It would simply feed into the underlying anger directed at Parliament and the parties, putting off the explosion of rage for another day.

There is a dangerous atmosphere brewing in Greece, as a sizable section of the population is enraged by the country’s politicians – they are attacked when they go out for dinner, barracked when they attend public events and Parliament comes under siege during demonstrations. It would be catastrophic if through another display of immaturity and self-preservation, the current generation of MPs and ministers fueled the belief being peddled by some that politicians are exclusively to blame for all of Greece’s ills. Perilously, it would mean that fewer Greeks would be willing to take a look at themselves and understand how they have contributed to the breakdown of the country, making it too easy for them to look for scapegoats instead.

Even in a democracy as fresh and unblemished as ancient Athens, blaming someone, anyone, was not a foreign concept. Ostracism served many purposes in the city state. One of them was to make politicians more accountable and more determined to serve Athens well. But those casting the ostraka were not always doing so with the greater good in mind, as historian Plutarch recounted in the story of how statesman Aristides, known as “The Just,” was ostracized. Ahead of the vote, an illiterate citizen approached the politician, not recognizing who he was, and asked him to write the name “Aristides” on his ostrakon. An upset Aristedes asked: “Why, what harm has he done you?” The voter replied: “None at all. I don’t even know him but I’m sick and tired of always hearing him called ‘The Just.’”

Gerekou’s swift exit this week was symptomatic of the lack of patience people have with Greece’s politicians. This patience is wearing thinner by the day but token gestures will only exacerbate the problem. If the political system fails to reform itself and convince voters there is a deep, long-term plan to enhance transparency and accountability, then its members – the just and unjust – face an inevitable ostracism that would leave behind a power vacuum much more treacherous than today’s ailing democracy.

This commentary was written by Nick Malkoutzis and appeared in Athens Plus on May 21.