Who's To Blame For Greek Debt? Don't Forget Tax Evaders' 60 Billion Euro Bill
Outside creditors aren’t the only ones loathe to throw money Greece’s way. Would-be taxpayers have been unwilling to part with their cash, according to a new EU Commission report that found the Greek government may have to write off some 30 billion euros
In recent years, Greece has lost huge sums to tax evaders. The current amount outstanding is estimated at 60 billion euros. Most of that money will have to be written off. There are 165,000 on-going court cases that together represent about 30 billion euros worth of unpaid taxes. Some of the cases are more than 10 years old.
The figures cited come from the first "Task Force Greece" report. Two months ago, at the request of the Greek government, EU Commission researchers had begun to examine the way Greece is being run and making suggestions for improvement.
The head of the group, Horst Reichenbach, a German EU official, spoke on Thursday in Brussels of the "substantial sums some Greeks have deposited in Switzerland." Reichenbach provided no details. Swiss media estimate that the amount of Greek money in their country at around 350 billion francs (286 billion euros), but Switzerland's financial sector says that estimate is overblown. The Greek debt pile amounts to 350 billion euros.
A bottleneck in the courts
The report says that corruption and mismanagement, incompetence and even an unwillingness by authorities to collect the taxes lie at the heart of the problem. The Greek government intends to set up special tax offices to deal with this segment, the report says. Reichenbach said it's reasonable to expect some quick results, citing used new methods used over the past six months to collect 122 million euros in unpaid taxes. Experts from various EU countries including Germany, France, Austria, Norway, Denmark, and Estonia have expressed willingness to help Athens in the endeavor.
But the report also notes that a major problem remains: Greece's overburdened justice system. There is a Greek tendency to take disagreements with the authorities to court, often in the hopes of dragging the case out indefinitely. The complexity and contradictions of Greek laws and government regulations pose additional complications.
This quickly became clear to Reichenbach and his small team working out of Athens and Brussels. "The culture leans more to producing laws than it does to results," the EU official said. The implementation of administrative reforms often went entirely unmonitored, Reichenbach added, and there was a lack of coordination between the different administrative sectors.
Reichenbach also said there were problems with the way the government makes calls for tender. On average, it took 230 days for the government to award public works contracts – more than double the EU average. Here too many cases were brought to court, and many contracts were awarded without following due procedures thus offering fertile terrain for corruption and price fixing.
Read the original story in German
Photo - kouk