Friday, 13 July 2012

Greece wounds me

'Wherever I travel Greece wounds me'.
        Giorgos Seferis.

The Greek Finance Ministry has been unable to collect court-ordered tax fines totalling 12.6 billion euros, or 6.2% of the country's gross domestic product, according to data posted on the Ministry's website.

The above amount includes the fine of 4.8 billion euros imposed on the Acropolis stockbrokerage  for its role in the structured bonds scandal three years ago. The state has not received a single euro of that yet.

There are in excess of 180,000 outstanding tax cases in the Greek courts. Under normal circumstances this would be extremely worrying, but given that such decisions of Greek courts are often not implemented, and given that the Greek State is administratively incapable of collecting taxes that are due, why should oustanding court cases surprise or worry us?

The answer is that the only way the Greek state is able to finance itself is by borrowing billions from the Troika of the European Commission, the European Central Bank and the IMF, and imposing ever harsher austerity measures on its citizens, which hits the poorest and most vulnerable the hardest, as the wealthy shift their money abroad and adopt all kinds of tax evasion manouevres.

This post is not about all those who have lost their jobs (unemployment has risen to 22.5%  and 52.1% for those aged 17-24), the homeless, the asylum seekers in detention camps, the immigrant workers living 25 in a room, the many who have killed themselves because they could not cope with the dramatic changes in their lives (Greece, which once had the lowest, now has the highest suicide rate in Europe), the young people who have no job and no hope of getting one, or the large families on subsistence levels.

This post is about a middle-class household who are still relatively well-off, who are managing and who have by no means joined the large numbers of those who are in despair. What has happened to this household, whose financial details I have access to, is a demonstration of the drip drip effect of loss of income and gradual reduction of living standards. It also shows how the Greek state responds to its inability and unwillingness to collect taxes by hitting out at every level of society, except for the rich.

M. retired three years ago, with a very good pension of 1900 euros a month. She owns her home, but has two loans that she has to repay every month. Her daughter, T,  who is in her twenties, was earning the 500 euros typical of her age group (hence commonly called the '500 generation'). M. had to occasionally help her daughter financially as she found that 500 euro a month did not go very far.

Then a series of unexplained and unexpected cuts to her existing pension started occuring. Within a year her pension was reduced to 1400 from the original 1900. Then the 13th and 14th salaries (an extra payment for Christmas, half for Easter and half for the summer) were abolished - another cut of  316 euros per month, bringing her pension down to 1184 euros per month.

The next change was lowering the tax threshold from 12,000 euros to 5,000 so that she is now expected to pay additional tax of 2100 euros  - a further drop of 180 euros, bringing her monthly pension down to 1004 euros .

By now M. was desperate: paying off the loans she was committed to was becoming extremely difficult.  But more was to come. Unable to collect taxes, last spring  the government had the 'brilliant' idea of imposing a property tax on top of the existing council tax, which would be collected through the electricity bills. No need to worry about collection here: if you did not pay then your electricity would be cut off.  M. had to pay 1200 euros property tax on the three bedroomed flat she owns and lives in and will have to pay this tax every year from now on. M.'s monthly income has now dropped to 904 euros.

But this was not enough. Four months ago, a further property tax was announced and she had to find another 400 euros to pay that. M.'s monthly income is now less than half  (46%) of what it was eighteen  months ago. 

Meanwhile, five months ago, T., M.'s daughter, lost her job as the company she was working for closed down because of the recession. M. now has to fully support her.

Yesterday came the ultimate blow, the twist of the knife, the message from a State that will bleed its citizens dry in order to feed its incompetence. T. was filling in her tax form. Income: none. She was doing this electronically, and immediately the None was changed to 3000. T., with no income at all, now has to pay tax of 116 euros.

This is the reality of an average middle-class household in Greece today. It's hard to imagine how grim life must be for the working class, the unemployed, the disabled, and the homeless.

(I took these photographs last summer in the Metaxourgeio area).


  1. This is a harrowing story. It's what "austerity" is about. And the people responsible for the crisis are getting away with it, continuing to avoid paying their tax.

  2. It is heartbreaking.

    Cannot see a way out, but as you said in your last comment, people are resilient and will find ways of coping.

  3. Bob said it all: you who philosophize disgrace and criticize all fears, bury the rag deep in your face, for now’s the time for your tears. Hopefully Tsipras and Syriza will, eventually, remove the need for the rag...

    1. Hi Sally,

      I don't seem to get that quote out of my head.... Which album is it from, again?

      He does (or should I say, did) have a way with words, old Bob!

    2. The Lonesome Death of Hattie Carroll - Times They Are A Changin'