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Ireland recruits tax experts to help Greece

15 March 2012 / 21:03:12  GRReporter
2702 reads

Victoria Mindova

Ireland is recruiting tax experts at the request of the International Monetary Fund to provide technical support to their Greek counterparts. The head of the task force for the economic growth of Greece Horst Reichenbach said the country can collect unpaid tax and social contributions to the amount of eight billion euro, but the Greek tax officers will not manage without help. Ireland offers active tax officers and retired ones willing to extend their length of service the opportunity to work in Greece.

The 2011 goal was to collect at least 400 million euro from delayed tax payments. Instead, Greek authorities have managed to go beyond the specified limit and collected almost one billion euro from tax liabilities accumulated in the past. However, the objective is to develop a tax system that will prevent non-payment of accrued liabilities rather than trying to collect old debts, European experts stress.

Other issues the European Commission task force notes are the 8,724 unfinished public projects (2000-2006) funded by European money. If quick steps are not taken in 2012, half of the three billion euro allocated for these projects most likely will have to be returned to the European public. This is stated in the third report by the European Commission task force on the status of the Greek economy.

Besides lagging public projects, Greece has a serious problem with liquidity, making it difficult to finance small and medium enterprises. The head of the task force Horst Reichenbach noted that the lack of guarantees is the main problem for obtaining European funds. Europe has allocated a total of 22.5 billion euro to support small and medium enterprises through the National Strategic Development Framework for the period 2007-2014. Of those, 14.5 billion euro are available at present of which four billion euro must be used in 2012. Two billion have been allocated to fund small business through the local banking system. The other two billion will go to supply the investment bank, which the Ministry of Development and Competitiveness planned last year.

"The Greek government votes and enacts laws relatively easily but applies them in practice with difficulty," said the European expert. From this perspective, Reichenbach was firm that bureaucracy has to be minimized as it is currently one of the main obstacles to the development of private entrepreneurship. Major problems remain the issuance of licences and permits, the lack of communication between the institutions and the slow administration and judiciary. He gave the example of export customs procedures that take 20 days on average in Greece given that the average duration of the same activity in the European Union is 10 days. In April this year, the European Commission is expected to issue a statement on the state of Greece. It will be the basis for drawing the plan to stimulate economic growth, which is known as the "Second Marshall Plan".

Reichenbach's report notes that since the outbreak of the crisis, about 60 thousand enterprises have closed and many more are expected to announce liquidation by the end of 2012. The task force head said that the PSI process of exchange of Greek government bonds is a success and ensures the payment of the second bailout to Greece. He did not fail to note that the new government should not relax. It should maintain the rhythm of implementing its obligations under the second memorandum imposed by the administration of the current Prime Minister of the interim government Lucas Papademos. The most important objective must remain the restoration of competitiveness, which declined primarily in the period 2005-2009. This will happen by an internal devaluation of wages and by giving impetus to production to regain positive growth.

Tags: EconomyMarketsHorst ReichenbachCrisisReformsGreece
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