Troika Says 80% Greek Debt Uncollectible



esodaBecause of austerity measures and even as it’s pressing Greece’s coalition government to go after tax evaders who owe more than $70 billion, the country’s international lenders have admitted that 80 percent of the country’s debt can’t be collected for a number of reasons, leaving it to workers to pay the freight.

The inefficiency of Greece’s tax collection mechanism combined with the inability of people to pay because of repeated pay cuts, tax hikes and slashed pensions resulted in 12 billion euros ($15.89 billion) in uncollected debts in the first 11 months of 2012, up up 1 billion euros ($1.32 billion) over the same period in the previous year.

It’s likely to get worse instead of better as new pay cuts, tax hikes and slashed pensions kicked in on Jan. 1 and with a $17.45 billion spending cut and tax hike budget plan approved for 2013-14 as tax evaders continue to skate free.

Finance Ministry data shows that the combined total of both old and new debts to the state now stands at 55.5 billion euros ($73.41 billion) and much of it may not be collected. The ministry found that 1.13 million periodic statements for Value-Added Tax (VAT) for the first 11 months of 2012 have not been submitted by enterprises and the self-employed, which means that they have withheld the VAT received from customers for sales made or services provided and not paid it to the government.

Old debts amounted to 43.49 billion euros ($57.6 billion) some 2.99 billion euros ($3.95 billion) of which concerns state companies and corporations. Another 8.5 billion euros ($11.25 billion) concerns firms that have already gone bankrupt while the remaining 31.8 billion euros ($42.1 billion) relates to various taxpayers and enterprises. The state has only managed to collect about 1 billion euros of this old debt, while writing off some 359 million euros ($523.1 million).

The new debts, recorded in 2012, amount to 12.07 billion euros ($15.98 billion) and are expected to steadily increase. The state has only managed to collect 1.1 billion euros ($1.45 billion) of this new debt and has written off another 179 million ($237 million.) The total of 2.19 billion euros ($2.89 billion) cashed in satisfies the requirement set out in the government’s bailout agreement with its creditors.

The Troika recommended that the government should open debtors’ banks accounts and automatically withdraw the amounts that taxpayers owe to the authorities even if it leaves people without any money to live on. Many Greeks though, especially the rich, don’t use Greek banksbut hide their money in foreign bank accounts, including in Switzerland, which refuses to give Greek officials their names. The Troika also said the government should review it policy for writing off debt and not be as lenient, even if people can’t pay.

(Source: Kathimerini)


19 COMMENTS

  1. @cd750aeb9e8d50e0188c34bcd9028cb7:disqus  Yes, the mother of all protest is around the corner…Politicians should expect to be lynched if not assassinated in retaliation of the poor people who committed suicide for no fault of their own other than not been able to provide for their families and themselves…I wish to see some politicians is executed by firing squad in the main square in front of people’s eyes…

  2. Another silly article by Andy the Commie. On one hand he says there is billions in uncollected VAT tax….in the other he rails against “rich”. 

    Andy educate yourself with what this means…..”then exo, then plirono”

    Then educate yourself as to who says it. 

  3. “I wish to see some politicians is executed by firing squad in the main square in front of people’s eyes…”

    You are mentally ill for making such statements.

  4. Both far left and far right extremists  are going to drive us to a violent civil war with irresponsible revolutionary rhetoric of this sort,

  5. Leftists like Andy are “patriots” when it comes time to demanding money from other Greeks. The rest of the time our leftists are “anti-nationalists” fighting again “fascism” (aka any Greek that attempts to protect our country from illegals, Skopians, or any sort of foreign threat)

    IMO a fair chunk of our leftists are unprincipled brainless cowards. They just parrot foreign media and ngos (that same Greek-hating trolls that now pretend not to notice the Skopians change into ancient macedonians and irredentist rhetoric to hide their shame for calling them “Macedonians”)

  6. ” I wish to see some politicians is executed by firing squad in the main square in front of people’s eyes..”

    I think any “Greek” that makes such treasonous terrorist statements should be of deep concern to Greek police services.

  7. Do we really need even more leftist strikes/riots shamelessly and irrationally begging for handouts that our government clearly does not have?

  8. Settle down Alex. Now you are starting to lose the plot. I gave you a wrap in another article but I’m not so sure now.

  9. Sorry Alex my apologies. I read it wrong. It was Maverick who made that comment about executing politicians.

  10. I know you don’t Leventi. My reason for writing this over and over against is because we have to speak out against populist extremists that are fermenting the conditions for civil war.

  11. No kidding. What it comes down to is do they want to drag our a debt reduction out for decades (creating political and economic instability) or do they want to reward Greece’s bad behavior with forgiveness?

    The Germans are the paymasters that have to decide Greece’s fate. The ones that have the memories that start in 1945 will demonize us and drag this out. (see Bild) Those are philhellenic and remember how we all treated Germans after two world wars will support and forgive our follies.

  12. I agree Alex. Greeks fighting Greeks is not the answer.What we DON’T need is another civil war.

  13. The whole Political System is ROTTEN to the CORE and needs to be torn into pieces, which may soon happen if they keep up these silly farces and investigation charades like going on now where not ONE HONEST Politican will admit responsibility…

    And now these low-life corrupt Parties PASOK & ND have actually had the “nerve” to vote their Parties 3.7M Euros for PASOK and 2.6M Euros for ND out of the State coffers, while they are asking all Greeks to suffer more austerity!

    THE REVOLUTION IS COMING SOON! and all will PAY DEARLY for their CRIMES!

  14. ” THE REVOLUTION IS COMING SOON!”

    Your calls for “revolution” (along with a few others calling for violence against Greeks) make me wonder if you are even Greek? Are you a Skopian pretending to be Greek?

  15. Interesting article and discussion… Although I’m not close enough to the detail to speak to the accuracy of the author’s referenced data points, I see that the broad points presented as accurate and thought provoking.  The commentary on the potential for riots is unfortunately real.  People will not continue to take life in the pressure cooker…  

    The blame of today’s problems in Greece and throughout the world is squarely on the shoulders of each country’s electorate… That is right, the ignorant and ill-informed “slim majority” of voters have brought this evil on all of the people.  Oh yes, we can’t forget those nonvoters that stated “my vote will not make a difference” or “I don’t like this individual representative of my party so I will not vote” as these people are equally at fault.

    Andy’s most thought provoking statement is as follows: “Because of austerity measures and even as it’s pressing Greece’s coalition government to go after tax evaders who owe more than $70 billion, the country’s international lenders have admitted that 80 percent of the country’s debt can’t be collected.”  If we forget about the rest of the details and just focus on this… What the heck is the Greek government doing?  Bottom line if this debt (including exponentially accumulating interest) can’t be serviced and ultimately can’t be paid back… Is the current strategy appropriate?  In my opinion it is not.  Restructure and write-down the majority of the debt.  If this means exit from EU… So be it…  Greece is Greece not EU.

    What Greece is in need of is “TRUE” patriots that put country first.  [Note: A true patriot is not one that is a great auditor but rather a great doer.  Show me… Don’t tell me.]  It is time for such Patriots to step up and show leadership.  It is time to remove all of fake patriots from office and replace them with Greeks that will unify people and allow Greece to show what She is capable of.

    Individuals vilify the rich, the public union members, the retired, the employers, etc., but who is actually attempting to solve the problems?  If some of the rich defrauded Greece they did it because the laws allowed it.  If the union member retired at 45; the system allowed it.  If the public servant demands a fakelaki for help; blame those that give him the fakelaki. Stop vilifying people and start collaborating to solve problems.

    Collaborate… Help each other to develop new businesses… Solve global problems… Sell the newly developed products and services to the world.  “γίνεται”  With 10 million people in Greece and at least that many in diaspora WE can do better than this.  Time to stop blaming and just solve the problems.

  16.  Excellent post.  I especially like your poetic line ” A true patriot is not one that is a great auditor but rather a great doer”

    Corruption and weakness cannot be defeated with words alone. It takes action. However to take action we first have to agree what action to take. The difficulty we are having right now is we are divided as to the causes and remedies of the current problems.

    I think it is quite clear to anyone remotely rational foreigners are not to blame for the “crime”  of lending us money they will never see back. At least some of the fault for this lies squarely on the shoulders of prior government’s that spent us into the ground, created a bloated corruption ridden bureaucracy, didn’t protect our borders, and failed to properly collect tax revenue. However as you suggest in a democracy politicians are not wizards that are single handedly responsible for everything.

    You argument to not vilify people is the ideal but only works when sides are moderate.
    When sides becomes too far removed it raises the
    level of rhetoric. This is what both left and right extremists have been doing these last few years in Greece. (see GD and Syriza)

    The problem as far as I am concerned is too many Greeks have an entitlement mentality. Despite all the leftist media that rants about impending GD “fascism” the reality is we have far more leftists extremists (as witnessed by the fact 30 percent of our population now vote communists like Syriza many of who admire mass murderers like Mao and Stalin while lecturing about GD)

    Too many Greeks believe a government is there to give them money and jobs (rather than primarily security to go about their lives). Rather than think what they personally can do, they expect the government to give them everything on a silver platter like spoiled children.

    Leftists will say “capitalism” was to blame for our problems but Germany seems to be doing ok South Korea is fine.  Plenty of other countries are in much better shape then us (that are technically mixed economies since no pure capitalist state exists). Communist North Korea on the other hand makes our current economy look like its booming!

    One fundamental differences is other countries produce things in trade. Once you do that you can generate wealth to pay for frilly things like services.Our leftists on the other hand want to to do things backwards. They want
    to feast before they can afford the meal (at someone else’s expense). 
    They want a quality of life like Americans or Germans while irrationally
    railing against the very businesses that create that wealth. They rant “racism” when we try to control illegal immigration.. then rant they have no job when some illegal take it way by working for a fraction of the money they would have made. (paid in cash)

    What do we produce? Drinks for tourists? Olive oil? Heck even the biggest Greek Yogurt manufacturer in the world is Turkish. No one is to blame for this but ourselves. We call ourselves Greeks but we sure haven’t been behaving like Greeks lately. We need physicists, mathematicians, and engineers not just  self-righteous basket cases that endlessly rant for money from others while producing nothing.

    Too many of our  leftists waste their entire lives focusing on demanding handouts for both themselves and others (harming themselves and others in the process). Rather than focusing on basics like their own education in in-demand skills (e.g. technology rather than more “sociologists”) so they can produce something useful beyond their own hot air .. they are out constantly rioting and striking?. How does this constant mentality of state sponsored leaching help Greece?

    If communists Syriza are so “generous” as they claim… can’t they voluntarily help other Greeks rather than using government force to do it? Even today instead of ranting they have no jobs… why not put their money where they mouth is and create a company that pays workers whatever they want? Why do they always expect someone else to do it for them?  What they frame as “sharing” is really just state sponsored thievery and excessive dependence on the state. This is the real reason the leftists hate austerity. They hate the fact they can’t take care of themselves.

    Austerity is the change. We need to embrace it not whine about it. When Greeks better understand that wealth is created not magically descended from the government they will be less generous with other people’s money and more generous with their own.

  17. Alex… What a passionate and well informed response.  Frankly, I agree with the majority of your thoughts.  However, although austerity may teach the small minority of lazy and ignorant people a huge and painful lesson it is donating Greece to shysters.  This is a sin to our forefathers that sacrificed their lives for the world, much less Greeks to have baseline democracy, freedom and liberty.  

    Under current conditions in Greece the debt can’t be serviced much less repaid (especially with the exponential compounding interest).  It is time for the leaders of Greece to develop an alternate path to austerity and current debt service.  If they can’t… It is time of the sons of Leonidas, Kolokotronis Papaflesas, Bouboulina and the like to take over.

    Greece needs to create an environment that generates jobs, improve GDP and get people to spend money (not take peanuts from them to pay unfunded liabilities and debt).  Greeks need to sit down and talk to each other as patriots to solve problems.  As stated in my previous comment; people are asking for handouts because they were promised handouts.  Most people are reasonable and will understand that everyone can’t have everything they were promised.  [Note: People need to be reminded of the word and attitude of “ΦΙΛΟΤΙΜΟ”.  We are the only people with this word which has a profound meaning and attitude but most of us have forgotten it.]  I’m sure that there are plenty of smart economists in Greece that can figure this thing out.  All I know is that the current path is flawed and will lead to much more pain and loss unless there is course correction and fast.

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