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Wednesday 24 September 2014

Greece falls short on tax targets

Published 17/12/2012 | 15:29

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Greek municipal workers protest against austerity cuts (AP)

Greek tax collection is still falling well short of key targets intended to reduce the country's staggering debt, the European Union has warned.

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An EU task force helping Greece overcome the financial crisis that brought it to the brink of bankruptcy said Athens still has trouble dealing with old, outstanding tax claims. With two months to go in 2012, it was still only about halfway towards recovering two billion euros.

In a report it said Greece made only 88 audits of large taxpayers, well short of a 2012 target of 300, and 467 of "high-wealth individuals," below a 1,300 target.

Overall, EU vice president Olli Rehn said Greece was nevertheless tackling problems "with determination and resolve."

Greece has been surviving on rescue loans from its partners in the 17-country eurozone and the International Monetary Fund since 2010.

The creditors agreed just last week to pay out the latest batch of loans after agreeing a series of debt relief measures, such as lowering the interest Greece has to pay on the loans and the completion of a bond buyback scheme.

Ratings agency Moody's warned that Greece's debt remains unsustainable despite those measures.

The continuing drop in Greek economic output, it argued, made it "unlikely" the country would be able to control is national debt "without further reduction on principal." That would mean that Greece's existing creditors - mainly other euro governments and the IMF - would have to take a cut on their loans, something they have so far ruled out.

In the short-term, the disbursement of the next batch of loans will keep Greece from going bankrupt and triggering more turmoil in financial markets.

In return for the money that will see Greece through winter, the country had to commit to further austerity measures, including more spending cuts and tax increases, to get the public finances back on track.

Press Association

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