Tax evasion has long been of the most highly-charged political issues in Greece. Last week, the Wall Street Journal reported that Evangelos Vanizelos, a former Greek finance minister, testified before Parliament that financial crime investigators had turned a blind eye towards Greeks who had deposited more than €1 billion of alleged “black money” in Swiss bank accounts. In 2010, he said, the Greek Ministry of finance had received a list of 2,000 possible perpetrators from Christine Lagarde, head of the IMF, who was at that time the French finance minister. According to Vanizelos, it was passed on to the police. But nothing happened.
Now it seems that the Government is anxious to keep a lid on the issue. On Monday, Kostas Vaxevanis, the editor of the Greek magazine Hot Doc, was arrested after publishing what has become known as the “Lagarde List”. Writing in the Guardian, he alleged that “in Ancient Greek mythology, justice is presented as blind. In modern Greece, it is merely winking and nodding. A study of the Lagarde list is highly revealing. Publishers, businessmen, ship owners, the entire system of power is shown to have transferred money abroad . . . Meanwhile in Greece, people are going through dumpsters for food.”
Although tax evasion has been dominating the headlines, the fact of the matter is that it is just one symptom of a deeper Greek malaise. In January, the popular American radio programme This American Life devoted an entire episode to revising how the Greek crisis unfolded, pitched at people with little financial conversance. Its tone may be slightly patronising to British ears, but as a potted history of the debacle it is invaluable. It reveals how, back in the mid-nineties, the notion that the Greek economy would be stable enough to join the eurozone was seen as madness. When the European statistical service assessed countries in terms of their inflation and interest rates, the Greek figures were so high that they didn’t fit on a normal graph, and required a special insert. Yet when the opportunity came soon afterwards to join the eurozone, the Greeks claimed to have magically stabilised their economy, and the Germans, keen for more customers, chose to believe the impossible. The rest is history; Greece was accepted, took huge advantage of the resulting low interest rates, spent like there was no tomorrow, got into trouble with bonds, and ended in the mess it is in today. Continue reading on the Telegraph website