Does Greece have tax evasion issue affecting bailout plans?

Paula Duffy's picture

The city of Larisa, in Greece is home to the world's largest per capita ownership of Porsche Cayenne SUV's, while stock markets teeter on news that a bailout isn't finalized.

Professor Herakles Polemarchakis, former head of the Greek prime minister’s economic department has done research that could very well irk EU citizens whose governments are in favor of funneling money to Greece, to keep the economy from cratering.

The Telegraph reported on Polemarchakis' claims that there are more Porsche Cayennes registered in Greece than taxpayers declaring an income of 50,000 euros.

There are more Cayennes per capital in Larisa than New York City or London. It seems there is an insinuation that Greek citizens may not be completely forthright when declaring their gross income for income tax purposes.

Larisa is in the agricultural region of Thessally that Prof. Polemarchakis says “...is the talk of the town in Stuttgart, the cradle of the German automobile industry, and, particularly, in the Porsche headquarters there.

He continued, "...farming is not a flourishing sector in Greece, where agricultural output generates a mere 3.2% of Gross National Product (GNP) and transfers and subsidies from the European Commission provide roughly half of the nation’s agricultural income."

Why is anyone interested in that data, you might ask? As the world's economic leaders huddle day after day about how to keep Greece's woes from toppling the Euro and other world currencies, questions are being raised about how serious the country's leaders as well as its citizens are about getting their fiscal houses in order.

Athens News
reported that economist George Soros and others who hold his view of the situation in Greece seem convinced. that even the agreed to deal that was forged with the leadership of Germany's head of state Angela Merkel is merely a temporary patch rather than a long term solution.

News is circulating about tax evasion in Greece that could put EU leaders in a bind when they try to sell a bailout plan to its own citizens who have already had to sacrifice more than they wanted.

Tuesday's decision to put last week's final bailout deal to a referendum vote in Greece caused havoc after the announcement, as investors searched for safe havens. It was the second biggest one-day fall ever recorded in Europe's AAA bond yields, with Italy and Spain taking the brunt of the punishment.

When France issues a declaration calling the decision on the referendum, "irrational and dangerous," it just adds to the jitters being experienced by all concerned parties. A no vote could result in Greece declaring bankruptcy, setting off a tidal wave of reaction that would put the country in jeopardy of being ostracized by the EU community and others worldwide.

It is hoped that some finality will come prior to markets cratering even more so on Wednesday and the days leading up to the planned referendum.

Comments

Submitted by KK (not verified) on
The number of Cayennes sold in Greece from 2003 till 2010 was 1570. Which is less than 1% of those sold in EU during the same period while Greece represents about 2.5% of EUs economy. The claim that their number is higher than in NY or London etc its just cheap propaganda of the chief financial advisor of George Papandreou. Your reader can understand why the economy of Greece collapsed during Prof. Polemarchakis period, his statistics seem to be made according to the needs of the "customers". He should be ashamed for spilling those that suffer from his incompetence. KK, Stuttgart

Add new comment