Greece and the financial crisis

I don’t think it’s any secret that Greece is at a financial crossroad at the moment, with an urgent need to make dramatic changes all round. And they are doing that. Greece's three creditors, the European Commission, the European Central Bank and International Monetary Fund - known collectively as ‘The Troika’ – have been tasked with keeping a very close watch on Greece’s finances as they determine the state of the economy prior to releasing each section of the huge loan that was granted to bail Greece out.

The IMF Managing Director Dominique Strauss-Khan said in an interview with Kathimerini, the Greek daily newspaper, that if Greece can maintain the momentum of reform, investors' confidence will grow, and through the gradual return of competitiveness will follow growth. He added that he thought that strengthening tax administration and coming down hard on tax evasion was crucial, both because it will help increase needed revenues but, more than this, it will help enhance a sense of fairness.

There has long been a feeling by the man in the street in Greece that the rich get away with murder in terms of tax evasion and that they are being asked to pay for this. Well, that’s all about to change.

According to Transparency International, the global civil society organisation leading the fight against corruption, the unrecorded or ‘black market’ economy in Greece could be worth an eye-watering 40 per cent of the country's GDP! According to Transparency International this would mean that the projected tax revenues of €54bn (£46bn) for the fiscal year 2010 should be €21bn higher – and that’s a lot of money!

How does all this affect you?

Well, doctors, lawyers and other professional people plus restaurant and hotel owners are coming under fire from the government, but also owners of ‘undeclared’ swimming pools are being investigated, and this may well apply to you.

We really do live in an Internet age don’t we? They have traced these ‘swimming pool offenders’ with the help of Google Earth! For instance a wealthy suburb in Northern Athens revealed 425 villas with pools but only 170 had been legally declare. Do bear this in mind if you have/are buying a property with a pool or you are thinking of building a pool won’t you?

The government is hoping to raise about €500m by offering an amnesty on unpaid taxes going back 10 years and it has decided to put tax declarations online for public scrutiny.
The SDOE, Greece's financial crimes squad, maintains that MPs were among the worst tax –dodgers – this is something that the Greek people have long thought and has caused enormous resentment.

Then too, in a move that bears out what I have long been saying, holiday properties that have been let out without declaring the rental income are also going to be followed up. This means of course that they do not have the EOT license that is essential if you want to rent your property out legally in Greece. Today more than ever this really is imperative, unless you want to be caught with an enormous tax bill plus a huge fine! The SDOE has promised to chase up these people, and that includes ex-pats who live abroad.

All this can only make Greece a better and a fairer place in which to live, and certainly a happier place for the man in the street…You do not want to be inadvertently caught up in this so do check with a good lawyer what your tax obligations are.

On a lighter note, a victim of the credit crunch would seem to be my favourite Greek drink, ouzo. It has seen its market share shrink in recent years, mainly due to cost. VAT hikes and additional alcohol taxes have upped the price and people have less money than they had – I certainly know the feeling! I know it’s an acquired taste, but do give it a try - it’s up to you when you are over in Greece next to save our beloved ouzo!

Have a happy week ahead – I am busy preparing my much-anticipated trip in May – are you planning to visit Greece this summer?

Warm wishes,

Carol.

The Overseas Guides Company
http://www.Greecebuyingguide.com