Athens: The boardwalks and bars flanking the crystal waters of Athens's marinas were once the places to be seen for Greece's well-heeled elite. But not any longer.
The Greek government, under huge international pressure to wring every possible cent out of its woefully leaky tax system, has rounded on the country's wealthy residents and demanded they pay their dues, and has driven fearful mariners away from the harbour in droves.
In recent months, teams of tax collectors have been making spot checks on luxury yachts and upmarket beach clubs in a desperate attempt to boost state revenues.
They target the marinas because high-earning Greeks have been buying expensive yachts that they claim are for a tourist charter business, for which there are large tax incentives. They then declare much of their professional income as if from that business, enabling them to pocket it free of tax.
For the Greek government at the moment, every cent counts. George Papandreou, the socialist prime minister, has been forced to negotiate a new bailout worth some €110 billion (Dh576 billion).
Dire consequences
A knife-edge vote in the Greek parliament on a package of cuts is expected on Wednesday. If Greece refuses to accept more austerity measures, the consequences for Greece, the EU and, indeed, the global economy could be dire.
Yet, politicians are struggling to convince their angry constituents that more cuts — and the closing of such tax loopholes — are the only solution.
"It's the biggest money laundering scheme around," said Kostas Tsiplantonis, a businessman with four sailing boats, about the yacht swindle.
A third of the vessels moored in the Marina Alimos, one of Greece's largest marinas, in the south of Athens, are the property of middle class doctors, lawyers and teachers who are now being targeted for possible tax evasion.
"People claim they earn only €20,000 taxable income and that the boats they own are charter enterprises and, therefore, under the current rules tax free. But it's clearly not the case," he said.
Such practice has been tolerated, but the net is closing in, and daily newspapers carry notices of a hotline for people to inform on tax dodgers.
"Unfortunately tax evasion is so extensive and has been tolerated by society for so long that it is a hell of a job to tackle. But it has to be done with urgency," said Costas Bakouris, of the Greek arm of the anti-corruption group Transparency International, which estimates that a third of the Greek economy is based on undeclared revenues.
Taking responsibility
"As well as short-term measures to find the rascals who haven't been paying what they should and prosecute them, we need a long-term plan to instill the behaviour of a civilised society where everyone takes responsibility — and that could take a generation."
The yacht owners who could, swiftly sailed off into the sunset before the tax man could find them. But many who remained found their vessels confiscated. A poll published last week showed that 73 per cent of the electorate were against the austerity plans to be debated by parliament.
If MPs fail to approve the proposals, then Greece will default on its loans, fail to receive the additional money, and risks spiralling into an economic abyss, unable to pay hundreds of thousands of state employees. The events have shaken the Eurozone to the core, with senior European officials openly describing it as a calamity on par with the economic woes of the 1930s.
At the heart of the Greek drama is the feeling that the people have profited for too long from feeble taxation, cushy jobs in the state system, and a generous work culture.
Even before the new bailout, Greece owes the equivalent of a year-and-a-half of total national economic output: some €350 billion. But the austerity plan, which largely centres on a €50 billion privatisation scheme, is unpopular both within parliament and on the streets.
Notis Mitarachi, shadow finance minister from the opposition New Democracy party told The Sunday Telegraph that the austerity package had serious flaws.
"If the last programme had met its objectives, we wouldn't be here again now but it was unsuccessful and now they are asking to approve another," he said.
Challenge ahead
The new finance minister, Evangelos Venizelos, has been given the unenviable job of convincing the world that Athens is capable of reforming the Greek economy, and persuading those at home that it is in their interest. He must persuade Greek society of the need to implement structural reform and a crackdown on tax evasion, which is estimated to cost the state up to €50 billion a year.
A rolling strike by workers at the state's electricity company over plans to sell off a 17 per cent stake is causing blackouts across the nation. In Syntagma Square where protesters have been camped out for weeks, many feel Greece should default on its debt and return to the drachma. But the idea of Greece leaving the euro would cause huge trauma far beyond the country's borders.
Across the entire Eurozone, governments are uneasily watching proceedings. France and Germany are leading calls to support Papandreou — mainly because their financial institutions are so entangled in the web of euro debt.
"It's a question of solidarity," said Andrus Ansip, the prime minister of Estonia, the newest member of the Eurozone. But he couldn't resist offering a pearl of wisdom. "If I may give my advice to Greece, it is that you have to cut public expenditure. You have to make structural reforms. And you have to create a really efficient taxation system."
