Prodigal nation: Europe pats Greece on the back
Tourists visiting the Greek island of Santorini these days may wonder why drones are flying overhead. The short answer: The government is trying to instill an ethic of integrity among Greeks. Drones check whether tour boat operators provide receipts to visitors, a clever way to change a deep-rooted culture of tax avoidance.
Last week, the European Commission announced that it would end its special surveillance of Greece on August 20, as the country has implemented numerous reforms – such as tax enforcement drones – over the past few years. last twelve years. In 2009, the Athens government admitted it had lied about the size of its debt, triggering a financial crisis in the European Union and nearly ending the bloc’s experiment with a single currency. After receiving very large bailouts – more than $300 billion in total – Greece has now “delivered on the bulk of its political commitments”, said the European Commission, the bloc’s executive arm.
He also repaid his debt to the International Monetary Fund – two years earlier. In 2019, Greece created its first anti-corruption body, known as the Transparency Authority.
“Greece today is a different Greece,” its prime minister, Kyriakos Mitsotakis, said in July. “It is one of the countries with the most dynamic growth and the strongest reduction in unemployment in Europe.”
One of the keys to the reforms, besides fiscal austerity, was tactics to stimulate tax collection. A Greek habit of tax avoidance was one reason the government long lied about the size of its budget deficit. In an unusual attempt to depoliticize taxes, a new collection agency was created to operate independently of the Ministry of Finance. The government is also offering incentives for people to switch from cash transactions to credit cards and online transactions.
Lower tax rates encouraged compliance. And a public relations campaign called “Apodizi, please” recommends that tourists ask for receipts.
“Thanks to Greece’s efforts,” noted the European Commission, “the resilience of the Greek economy has improved significantly and the risks of spillover effects on the euro area economy have significantly diminished.”
Greece still ranks among EU countries when it comes to tax avoidance – better than Romania but not as good as Italy. Yet tax revenues are rising and, as Greece’s top tax collector, George Pitsilis, told the International Monetary Fund, it’s time for Greeks to develop a sense of personal responsibility. Greece’s European partners have now endorsed the country’s progress so far – ending their watchdog role over Greek reforms.