Saturday, January 12, 2013

It's Time for Greece to Thaw.


When I started this piece my intention was to write about the centimeters of atmospheric water vapor frozen into ice crystals that have been falling in light white flakes upon Greece this past week.   Yes, snow. 

But that got me to thinking of “snow-job”—urban slang for “an effort to deceive, overwhelm or persuade someone with elaborate often insincere talk.”  And the next thing I knew my mind had wandered to Greece’s Parliament and all the “snow” churning out of that august institution in what can only be described as frantic efforts by the current three-party governing coalition (and a lot of other folks) scrambling about for cover and scapegoats as they scream, “Beware of French bearing gifts!”

Christine Lagarde with gift in background.
It all started with a solitary Swiss bank employee living in France suspected by his bank of stealing details about 24,000 non-Swiss customers with Swiss accounts.   The culprit lived in France and so the Swiss asked the French to arrest him.  They did, but they also decided to keep the information and use it to track down those on the list who owed France taxes.  Their efforts netted 4000 depositors who paid 1.2 billion euros in unpaid taxes when French authorities gave them an offer they couldn’t refuse:  We’ll give you the opportunity to come forward and pay what you owe—or else.

The French did not keep the list to themselves.  Through France’s then Finance Minister, Christine Lagarde (now Chairman of the International Monetary Fund), France shared the list as a “gift” to other European Union member states, including Greece.  That led to a mixed bag of collection successes by those who followed the French example of contacting suspected tax evaders.  For example, EU Mediterranean members Spain and Italy used the list to successfully collect six billion and 570 million euros, respectively.     

As for Greece, well, that’s another story.  More like a major Greek drama.  One with every spoken line peppered by the word “alleged” as each suspect disputes every fact and every fact is suspect in a plot inexorably percolating along toward a murky, far from predictable end.  

In October 2010 Minister Lagarde delivered a CD to Greece’s then finance minister (let’s call him “Former Minister”) naming approximately 2000 Greeks with Swiss bank accounts who might or might not have paid their taxes on amounts in those accounts.  That CD was never officially logged in by the Former Minister and all that he did with it during his time as finance minister was to copy the CD onto a memory stick and ask Greece’s Financial Crimes Squad (“SDOE”) to conduct a preliminarily investigation into twenty names on the list.  According to Former Minister, he never actually looked at the list but rather had an aide (whom he refuses to identify) review the list to come up with the names of those who “justified further investigation.” 

Legarde, Former Minister Giorgos Papakonstantinou, and Successor Minister Evangelos Venizelos
His replacement (“Successor Minister”) claimed he did nothing with the list because he was told by the head of SDOE that as the list was obtained illegally it could not be used against those named on it—a conclusion viewed as suspect by many in the face of Greece’s desperate need for tax revenues and the successful efforts of colleague EU states at employing the list in their own tax collection efforts.  But, be that as it may, nothing happened with the list for almost two years.

In September 2012, after Successor Minister had moved on to head his party (in what is now part of the fragile three-party coalition governing Greece), Greece’s new minister of finance learned of the list and, when informed that neither Former nor Successor Minister had any idea what happened to it, announced that he’d ask the French for another copy.

That’s when Successor Minister suddenly remembered that the memory stick was in his secretary’s desk drawer.

A few weeks later, in late October, a Greek journalist version of Guy Fawkes decided to blow up Parliament by publishing a copy of the Lagarde List he’d received “anonymously.”  The journalist, Kostas Vaxevanis, was promptly arrested for that act and prosecuted by the government, but found innocent after a three-day trial.  The prosecutor didn’t like that verdict and is retrying him for the same crime.

Guy Fawkes failed in his plan to blow up English Parliament on November 5, 1605

But by then the names were out, and though being on the list did not mean that one was a tax evader or had done anything unlawful, to the millions of Greeks suffering though their Great Depression, it was all the proof they needed that their government was allowing the rich and connected to play by different rules when it came to paying taxes.  And the mysterious deaths within days of each other of two high-ranking Greeks named on the list, added fuel to the ever-present conspiracy theorists’ fires.

A few days after Christmas the government made a startling announcement:  A comparison of the list on the memory stick with a copy of the original Lagarde List (obtained earlier that month from France) revealed that three names had been deleted—all relatives of the Former Minister.

The media went wild.  Successor Minister immediately threw Former Minister out of their party and Parliament pressed for an investigation of Former Minister.  In response, Former Minister implied that, if the memory stick were tampered with, Successor Minister was behind it in an effort to make Former Minister the scapegoat, and take pressure off the current government for what might be its part in the scandal.

Of course that prompted opposition parties in Parliament to jump in with a demand that Parliament also investigate Successor Minister, a move he and the governing coalition vigorously opposed. 

The story had more legs than a centipede.

And this week came the latest twist: SDOE—remember, that’s Greece’s Financial Crimes Squad—analyzed the doctored memory stick and determined it was altered after Former Minister left office and before Successor Minister assumed the position. 

In other words, no one did it. 

Ahh, political farce.  Who does it better than the Greeks?

But this is not a play.  The Lagarde List has become a symbol for what is wrong with Greece and a rallying point for the anger of the disenchanted.  According to data released this week by the Hellenic Statistical Authority the number of Greeks living in conditions of poverty jumped by nearly 400,000 from 3.031 million in 2010 to 3.403 million in 2011.  That’s almost a third of the country.  And it’s 2011 figures.  I can’t imagine things got better in 2012.

At the same time, Greece’s Prime Minister sees a “wave of confidence” that the country can ride to better times, and some in the media see “harbingers of hope” in the form of Greeks now willing to take on the “vested interests” that have ruled Greece for so long and driven its “economy and households to bankruptcy.”

I hope they’re right, but it’s hard to imagine how things can truly get better if the Greek people don’t trust their government to be fair, evenhanded, and transparent.  Greeks do not want more snow.  They’re buried in it.  What they need is heat applied where it will do the most good. 

They need to thaw. 

Jeff—Saturday

7 comments:

  1. Amazing, Jeff, simply amazing. And the most amazing thing is that you can actually make me feel (a little) better about the US government!

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  2. Sorry about that, Everett. Maybe Tim can can add a comment that will once again make you feel utterly despondent about US. :)

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  3. The pictures are lovely, Jeff. Is there anyone charismatic enough to talk about this with some effect? It seems that too many people are suffering without someone emerging to speak to this. But Greece doesn't let the US off the hook. The trouble is our idiots are too powerful as well.

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  4. Much like the US, Lil, virtually everyone in government comes across as out for their personal over the public interest, and woefully out of touch with the harsh realities confronting those they were elected to represent. And sadly, it seems the charismatic ones are those advocating the most extreme positions.

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  5. This is the preface to your next book, right, Jeff? I'm gobsmacked.

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  6. Boy, I had the exact same thought, Stan. Incredible. Jeff, you ARE using this, right?

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  7. To be honest, Stan and Lisa, nothing that's happened so far in connection with the Lagarde List fiasco struck me as unique enough to justify a story in and of itself. That's just the way the Greek people expect things to be done--government protects the rich and connected. Having said that, the book I just finished--coming in September--relies on those proclivities in a story centered upon what I see as the greatest threat facing the country in these dire economic times.

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