Finding Swimming Pools with Google Earth: Greek Government Hauls in Billions in Back Taxes
Part 2: Conflict Guaranteed
But the auditors will most likely continue to exert pressure on Papandreou. Athens urgently needs to curb skyrocketing costs in the Greek health system, liberalize the labor and energy markets and privatize loss-making state-owned companies -- primarily Hellenic Railways, which owes nearly 10 billion, making it the most debt-ridden railway in Europe.
Privatizations and cutbacks in the public sector -- in Greece, such measures are guaranteed to lead to conflicts. Over the past week, truck and tank truck drivers protested efforts to liberalize their profession in line with EU regulations. The sale of coveted truck licenses has, up to now, ensured that they can retire with ample pensions, but now authorities want to do away with these costly concessions and open up the trucking market.
Was this a sign of much worse conflicts looming on the horizon? The chaos at Greek filling stations that thousands of tank truck drivers unleashed in the middle of the high season provided merely a small taste of the wave of strikes that is expected to roll across Greece over the coming weeks.
Unpleasant Times Ahead
Kostas Papantoniou, 59, a civil servant and the vice president of the powerful civil servants' union, predicts that the government will face far more unpleasant times. "They say that Greek civil servants are too expensive and too numerous," says Papantoniou, "but that hardly corresponds with reality. Eighty percent of us earn between 700 and 1,400 a month net. Would you call that privileged?"
There is no doubt, however, that permanent positions in the public sector are often awarded very generously, all too often in the wake of elections. Up until last week, nobody could say precisely how many jobs were concerned. Then the government launched a detailed census on the Internet and had teachers, police officers and firefighters fill out an online form, providing for the first time a clear picture of the number of people on state payrolls. Since last Friday, they now know that it is 768,000. The planned cutbacks in salaries and bonuses will hit many of them extremely hard.
Among the angriest civil servants are those who intend to retire this year. They are actually entitled to a one-off payment from the civil servants' retirement fund that they have paid into for decades -- on average 40,000. But to avoid further burdening the budget, the socialist government has temporarily put a stop to these payments. The idea is to ensure that there is the maximum amount of money possible in the public coffers when they are inspected by the IMF and EU auditors.
By delaying these payments, though, the state is surreptitiously accumulating new debts, argues Athens business journalist George Kyrtsos. "While the government is paying its debts abroad on time, domestic payments are simply being postponed," he says. "This can't work in the long run."
For months now, some 4,000 former employees of the recently privatized Olympic Airlines have been waiting for severance payments from the state. The state has also withheld reimbursements of value-added tax for companies. The amazingly reduced government budget that the Papandreou government intends to use to impress the European Union and the IMF could once again be attributed to very Greek and very creative accounting -- and turn out to be yet another example of the notorious "Greek statistics."
- Part 1: Greek Government Hauls in Billions in Back Taxes
- Part 2: Conflict Guaranteed
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