Greece's most exclusive beach club is the "Nammos" on the island of Mykonos, where the drink of the season is Mastiha, a brandy-based liqueur flavored with resin from the mastic tree. Konstantinos Tsakiris, 40, is gulping down a glass of Mastiha as he gazes out at the sea. "There's no crisis here," says Tsakiris, who is one of Greece's biggest ship owners and the principal owner of the Greek association football club Panionios Athens.
Luxury motor yachts and sailing boats are bobbing at anchor in the narrow bay of Psarou. The deckchairs at the Nammos are so coveted that many are booked in advance for the whole summer -- at €3,000 ($4,140) apiece. "You can do anything you want here, anything that's crazy and fun," says Tsakiris. He has the beginnings of a paunch, wears his hair short and has a large tattoo on his chest. Next to him, a Lebanese construction magnate is pouring champagne from a €250 bottle onto the heads of his young female companions. The Nammos is the kind of place where tabloid reporters get their stories.
But the celebrity club has also been making headlines recently on the political pages. The Greek finance minister has ordered the club's owner to pay a remarkably large fine, even issuing a press release to make sure the public knows the exact sum: €3,972,930.
This is a new approach, and it isn't exactly in keeping with European data privacy regulations. But this is precisely the government's intent.
Reeducating the People
Greece is broke. To avoid a national bankruptcy, Prime Minister George Papandreou has not only cut public spending on pensions, civil servants' salaries and subsidies, but he has also raised property, sales and income taxes, increased the cost of gasoline, tobacco and alcohol, and raised other taxes on luxury goods.
But even all of these measures are not enough for the country's overseers from the European Union, the European Central Bank (ECB) and the International Monetary Fund (IMF). Last week, they criticized a law designed to collect back taxes, which will likely raise only €2 billion in additional tax revenues over the next two years -- a drop in the ocean compared with the estimated €35 billion in taxes the Greeks have failed to pay during the last decade.
Papandreou has begun an attempt to change the Greek way of life, a mentality that for years has had little to do with public spirit, but which has spawned a large shadow economy and a great deal of tax evasion and corruption. He has embarked on nothing less than an effort to reeducate his people.
The Papandreou administration says that the new measures will have a "sustainable preventive effect." The Finance Ministry wants to make it "unmistakably clear" to ordinary citizens who have been hard-hit by austerity measures that tax evasion and nepotism are no longer acceptable, even for the affluent.
'A Magical Night'
As a result, ordinary Greeks are now learning some previously unknown details about the lives of the country's rich and famous. One of the revelations involves an incident at the Nammos, which began with a concert given by the celebrated pop singer Antonis Remos.
On a balmy summer evening, Remos serenaded about 3,000 guests attending an exclusive dinner -- it was a "magical night," the papers wrote. But while "the celebrities and corporate elite were applauding Remos," tax investigators had gained access to the club through a back door.
What they found was -- absolutely nothing. Not a single invoice, "not one receipt," as the tax investigators told the press. But when they took a closer look at the club's books and the owners' bank accounts, they did find something, in the shape of €4 million that was unaccounted for.
The club's owners read about the consequences of the raid in the papers. They read about the "massive fine" and the certainty that from then on, they and all of their other businesses were going to find themselves "in the tax authorities' crosshairs."
The same also applies to their less affluent fellow citizens. It is a hot morning and Angelos, an air-conditioning technician, is late for an appointment in Kato Alepochori, where he is supposed to repair the air-conditioning in a private apartment. Instead, he is standing in the blazing sun at a tollbooth on the outskirts of Athens, with his back to the shimmering waters of the Saronic Gulf.
Angelos was stopped by Finance Ministry tax investigators, who wait just past the tollbooths and, using red batons, wave vehicles to the side of the road. They have already hit pay dirt with the first vehicle, Angelos' van.
His delivery notes don't match the license for his van. The agents instruct Angelos to remove the license plate, impound the vehicle for two months and order his boss to pay a €3,000 fine. It is possible to challenge the fine, but the prospects of success are slim.
In December, the Finance Ministry established the Financial and Economic Crime Unit, which reports directly to the finance minister and is equipped with extensive powers. The inspections are expected to bring in at least €1.2 billion in additional tax revenue by the end of the year. The agency itself has set the bar even higher, at €5 billion.
'It's Not about the Money'
The government needs to increase its revenues by 13.7 percent, or about €6.6 billion this year. This is the requirement that has been imposed by the troika of the EU, the ECB and the IMF as a condition of their continued approval of bailout loans for the beleaguered country. The watchdogs point out that Greece has only managed 3 or 4 percent so far.
About 97 percent of Greek businesses are small or very small operations with up to nine employees. This explains why the tax investigators are focusing on minivans and panel vans. "You have to have a feel for it," says Kostas Arvanitis, 50, who has been working for the tax authorities for 27 years. "The pressure to perform has increased considerably." In the past, his team conducted one or two random checks a day, but now they are inspecting five to seven vehicles at a time.
Arvanitis is in charge of today's operation. He says that cheating on the roads is common practice, and that people try to save money by using their private vehicles to make a few quick deliveries for outside companies or by illegally taking along their friends.
Arvanitis and his team have been on the road for seven hours. They have caught two offenders and levied €4,000 in fines, which will result in hours of paperwork. Was it a success? "It's not about the money," says Arvanitis. "Our work is educational. In fact, we don't even mind if we don't have to impose a single fine."
'A Simple Tax Irregularity'
Aristidis Spirtos, a 43-year-old cosmetic surgeon, received the bad news by phone. Friends had called to tell him that his name was in the paper. He says that he was "puzzled" at first.
The cosmetic surgeon, together with 56 other Athens physicians, appeared on a list published by the Finance Ministry showing doctors who had committed tax offences. Spirtos was accused of "failing to update his business accounts to reflect revenues and expenditures," as well as keeping incomplete patient records. He has been fined €1,000 -- so far.
"It was a simple tax irregularity," says Spirtos. "I just didn't manage it because I was short on time. I work on my own, after all." But his explanation wasn't good enough for the tax authorities.
Spirtos went to medical school in Rome, did his residency in Athens and received further training in Britain. Now he is sitting in one of his new treatment rooms near the city's Olympic stadium. There are diplomas from several European cities hanging on the wall.
Just €300 a Year in Profits
He performs "minor procedures" in his practice, says Spirtos, "Botox stuff" or laser hair removal, for example. His clients are actors and other celebrities, but they also include a growing number of "ordinary" people. He performs more significant corrective procedures -- breast implants, tummy tucks and buttocks augmentation -- at a nearby private clinic.
Spirtos says he was "totally shocked" when he began to receive more calls. At that point the doctor wasn't even aware that he, together with 150 other doctors from Athens' upmarket Kolonaki neighborhood, had also appeared on another list that included the income they had reported. Some 100 of the doctors reported that they had made less than €35,000 in the previous year, with most reporting significantly less than that. Spirtos is ninth on the list, with a reported net income for the year of only €3,906.15. One dentist declared only €300 in profits.
Although the doctors are only listed by their initials, the fact that their specialties are included makes them easy to identify. Spirtos feels "pilloried" and accuses the government of "cheap sensationalism." He insists that the underreporting of income is a "trifling offence."
Almost all of the doctors on the list agree. Athanasios Alexandridis doesn't like to discuss his personal financial matters, preferring to comment on the general phenomenon. "We have a gray economy," he says. "Everyone knew this, and everyone was somehow a part of it."
Alexandridis, 57, who studied medicine and psychology, has worked as a psychiatrist for 33 years, treating patients for neuroses, depression and psychoses. The tax authority says that he refused to open his books to the tax investigators, and that he reported €12,238.63 in annual income.
The list is "carefully calculated political propaganda," says Alexandridis. "The government wants to show that it's also tackling the rich." Speaking quietly, the doctor describes how the government's campaign has affected him and others like him. "The campaign was probably perfectly legal," he says unemotionally. "But not everything that's legal is morally OK."
'We All Played a Part'
Alexandridis sees himself as part of a "social phenomenon that has been the reality for decades, and in which we all played a part."
Prime Minister Papandreou wants to take on this status quo, without regard for anyone's position in society. "We are determined to fight the shadow economy," says Papandreou. But will it be enough?
Alexandridis says he intends to draw a lesson from what he calls "this matter." "I will make sure that everything is above board in the future," he promises. But then he adds: "Those who apply pressure and expose people may be successful at first -- but then anger sets in."