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Greek report
by Euro Reporter
2015-09-15 09:49:59
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Golden Dawn is running in Greece's elections again. Here's why that's scary.

Nikos Michaloliakos, a former mathematics student who had been a member of extremist right-wing youth organizations since his teenage years and was imprisoned for participating in bomb attacks in Athens, launched “Golden Dawn,” a national-socialist journal supportive of Greece's former military junta, in 1980. Five years later, he founded a political party with the same name. From the start, Michaloliakos’ program and semiotics were quintessentially nationalist and racist, strongly reminiscent of Nazi ideology. Golden Dawn was recognized as a political party in 1993, but because of its radical beliefs remained marginal at first. In the 1990s, the party gained some attention when it opposed the name change of the Former Yugoslav Republic of Macedonia to the “Republic of Macedonia” -- a designation Greeks associate with the territories in the north of Greece -- and because of the rise of violence by extreme-right street gangs that were behind attacks on demonstrators and left-wing students. Golden Dawn participated for the first time in elections in 1996, receiving 0.1 percent of the vote. They didn’t participate again in elections until 2009, when they won almost 0.3 percent of the vote.

gr01_400_03Golden Dawn's big boost occurred under the conditions of harsh economic crisis, biting poverty and surging unemployment that erupted in Greece in 2009, and grew after the country signed up for a number of bailouts by its European partners. As the party made vocal accusations against “corrupt” politicians of the old status quo and condemned the austerity brought on by the bailouts, Golden Dawn saw its popularity rise among the disaffected. In the 2012 parliamentary elections, Golden Dawn won 6.9 percent of the popular vote; in elections this January, it came in third behind Syriza and New Democracy. Golden Dawn's political program today is a mix of anti-austerity and anti-EU rhetoric, with strong elements of racism and anti-immigration policies. They propose to arrest and deport all “illegal immigrants” and hold them in detention camps that “will not resemble five-star hotels” between arrest and deportation. In recent years, and especially since it entered the Greek parliament, Golden Dawn has attempted a face-lift of its profile, presenting its ideology as merely nationalist and trying to shed all suspicion of links to Nazi ideology. Investigations by journalists and academics over the years, however, have revealed articles in the Golden Dawn magazine admiring Hitler, and found images of Nazi salutes during Golden Dawn rallies.

In terms of economic and social policies, the party does not propose specific fiscal and economic programs needed for the country to overcome the crisis. Rather, Golden Dawn sticks to criticizing the proposals of other parties and advocating the expulsion of immigrants. When it comes to the thousands of refugees and migrants arriving daily on the islands of East Aegean, Golden Dawn representatives who have visited them have been speaking on behalf of residents who do not want to see their islands “collapse under the thousands of illegal immigrants.” In September 2013, anti-fascist hip hop artist Pavlos Fyssas was murdered by a Golden Dawn member in the city of Piraeus. According to investigators, the perpetrator, Giorgos Roupakias, had been in direct contact with top Golden Dawn party members during and after the murder. Although Golden Dawn has denied all involvement in the Fyssas murder, several high-standing party members, including party leader Michaloliakos, have been charged in the wake of the investigation of the case. They now face several accusations, including of forming a criminal organization and being responsible for assaults on immigrants. 


Greece's Tax-Evading Professionals

Greece would be much better off if the government could collect the taxes owed by the self-employed. That's the lesson from a paper released this month that uses an innovative method of capturing tax evasion. Estimating shadow economies is tough. Friedrich Schneider of the Johannes Kepler University of Linz in Austria, Europe's leading authority on the subject, has pointed out that none of the accepted methods is completely reliable. For example, comparing expenditure and income statistics isn't ideal because the results are distorted by omissions and errors in national accounts; and using indicators such as electricity consumption doesn't take into account shadow sector activities that don't require much energy. Still, Schneider measures Europe's shadow economies annually. In gross domestic product terms, Greece has the second biggest shadow economy among European Union countries without a Communist past -- after Cyprus. Schneider estimates that, in Greece, unreported revenue accounts for 23.3 percent of GDP, or $55.3 billion. That includes illegal activities such as the drug trade and prostitution, as well as activity in the legitimate economy. Had it been subject to taxes -- at the prevailing 40 percent rate -- the shadow economy would have contributed $22 billion to the government's coffers, arguably enough to make international bailouts unnecessary.

The latest paper -- by Nikolaos Artavanis of the Isenberg School of Management, Margarita Tsoutsoura of the University of Chicago and Adair Morse of the University of California at Berkeley -- the unreported incomes of self-employed workers account for about half of the total. The researchers used loan application data from a big Greek bank. On average, the bank's clients would need to spend 78 percent of their officially reported income to service the loans they requested. The bank, however, regards the reported income figure as a fiction, as do many other banks in eastern and southern Europe. As a result, it uses estimates of "soft" -- untaxed -- income for its risk-scoring model. Artavanis, Tsoutsoura and Morse recreated these estimates and concluded that the true income of self-employed workers in Greece is 75 percent to 84 percent higher than the reported one. In 2006-2009, that meant 9 billion euros ($10.1 billion) to 11 billion euros a year in lost revenue for the Greek government. The tax evasion is concentrated in highly educated and powerful professions, the researchers found. On average, a medical professional evaded 32,500 euros a year in taxes. And Greece has the EU's highest self-employment rate: Almost a third of Greeks work for themselves. 

Even the leftist government of former Prime Minister Alexis Tsipras, which came up with unworkable schemes to crack down on tax evasion -- from using housewives and tourists to inform on small businesses to a levy on cash withdrawals -- failed to lean on Greece's top professionals. Atravanis and others wrote: “Out of 13 industries, the four most tax-evading industries (medicine, engineering, education, and media) account for 61.7% of the non-lawyer Parliamentary votes. If we add in the next two categories (tourism and accounting/finance), the percentage rises to over 80%, excluding lawyers, which would also be high on tax evasion. The alignment of the occupational backgrounds of Greek parliamentarians to our top tax-evading industries is only an association, but may suggest one possible reason behind the lack of willpower to enact tax reform.” Greece's intellectual elite could fix many of the country's economic problems simply by honestly declaring its income. Nobody seems to be interested in applying that kind of pressure, though. The researchers suggest the government should sell occupation licenses through the powerful professional associations: a harsh but effective way to collect more money. The shadow economy -- and particularly the contributions of professionals -- is an enormous potential resource for governments. Unfortunately, politicians, who often are from the same professional classes, sometimes turn a blind eye.


Greece in Danger of Having to Keep Hundreds of Thousands Refugees

Greece is in danger of having to accommodate hundreds of thousands of refugees after Germany decided to temporarily suspend the Schengen Treaty. The Schengen agreement guarantees the right of free movement across the borders of European Union member states. However, on Sunday Germany closed its borders with Austria refusing to receive any more refugees. As a result, hundreds of thousands refugees might end up trapped in Greece and Italy, which are the main entry points to Europe. German Chancellor Angela Merkel said that, “Greece must take responsibility for the protection of the EU’s external borders, which are currently not secure.” Now Athens is forced to keep more refugees and migrants who are not likely to be forwarded to the European destination of their choice

Meanwhile, a new maritime tragedy occurred on Sunday morning in the sea area off Pharmakonisi island, adding to the large number of victims of the exodus from Syria and Afghanistan. A wooden boat carrying an unknown number of refugees and migrants capsized off Pharmakonisi. The Hellenic Coast Guard collected the bodies of 34 people near the boat. Among the dead refugees were four babies and eleven children. The coast guard rescued 68 people while 29 others managed to swim to Pharmakonisi. Greek interim Prime Minister Vassiliki Thanou criticized the comments of the German Chancellor about Greece’s alleged failure to protect its borders saying that it is hard to guard 16,000 kilometres of sea borders without the help of the EU.

Thanou was at the island of Lesvos on Sunday inspecting the processing of refugees. She reiterated that the refugee issue is not solely a Greek problem but a European problem and called on European nations to assume their share of responsibility. On Tuesday, Greece will receive 33 million euros from the EU as a first tranche of funds allocated to deal with the processing of migrants.


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