Greek Economy Greek Loan to Germany during World War Two Greek Economic reform Transparency Tax evasion in Greece Improvements in the Greek economy since the Global Financial Crisis Namibian Case Study Lagarde List of Greeks with Bank Accounts HSBC Geneva Switzerland Option B Default on Greek Debts Consequences of debt default The Troika Reform or Austerity in Greece IMF policy Merkel

1. THE GREEK ECONOMY
A presentation on the Greek Economy
by
Akis Haralabopoulos B.Commerce (Economics/Econometrics) (UNSW)
On the occasion of the 39th Greek Festival of Sydney
Greek Community Club, Lakemba NSW
DEFERRED UNTIL 2022 DUE TO COVID 19 PANDEMIC
The author can be contacted on alphaeconomics@netscape.net
22/08/2021 1

2. OUTLINE OF PRESENTATION
• Recent economic developments.
• Austerity or economic reform?
• Was there ever really a “Plan B”?
• Reality and recovery for Greece.
Disclosures: Akis Haralabopoulos is not a current member of any political organisation in Greece or Australia. Similarly,
Akis Haralabopoulos has no business interests in Greece that would compromise his objectivity. No payment of any
kind has been requested or received by Akis Haralabopoulos to produce this presentation.
Where possible only official government and International Agency data has been applied.
All material including this presentation, calculations, spreadsheets and sources of data are freely available upon
request. Where this material is used it would be appreciated if the author was referenced.
Akis Haralabopoulos is a member of the Australian Hellenic Educational Progressive Association.
22/08/2021 2

3. Part One: Recent economic
developments
-12
-10
-8
-6
-4
-2
0
2
4
6
8
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
€
Greek Annual growth in Gross Domestic Product (Source: IMF Data 2021)
Greek output collapsed by around 30 per cent
between 2008 and 2013. recovery since the
adoption of economic reforms has been
modest.
22/08/2021 3

4. The harsh reality of Greece’s recovery post Global
Financial Crisis (GFC) is apparent when compared to
the European Union
22/08/2021 4
100
104
108
114
120 121
128
132 132
126
119
107
99
97 97 97 97
98
99
101
93
97
85
95
105
115
125
135
145
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
€
Greece European Union
Gross Domestic Product IMF Data GDP Indexed to 100.0 as at Year 2000
Greek output collapsed by 26.5 per cent from 2008 to 2013 and by 2018 the Greek economy
was about the same size as in 2000. By comparison the EU economies saw their output fall by
5 per cent between 2008 and 2009.
However, the EU region has expanded strongly to be 17.5 per cent larger by 2019.

5. Greek unemployment has remained
stubbornly high
22/08/2021 5
0.0
5.0
10.0
15.0
20.0
25.0
30.0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Greece - unemployment rate
Source: Hellenic Statistical Authority El+Φύλλο2!$53:$53 Stat

6. Greece – total employment
Source: Labour Force Survey, Hellenic Statistical Authority
22/08/2021 6
3,250.0
3,450.0
3,650.0
3,850.0
4,050.0
4,250.0
4,450.0
4,650.0
4,850.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Total employment has not recovered
since the GFC. As at the end 2020
there are some 689,000 fewer jobs
in Greece compared to the start of
2008 when 4,567,200 People were
employed.

7. Greece – Labour Force Participation Rate
Source: ILO Stat Explorer LFS-EU-Labour Force Survey
22/08/2021 7
49.5
50
50.5
51
51.5
52
52.5
53
53.5
54
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
The decline in the participation rate suggests that
unemployed people leaving the work force plus those
leaving Greece has contributed to the reduction in the
unemployment rate.

8. Business investment has not recovered
22/08/2021 8
-
10,000,000,000
20,000,000,000
30,000,000,000
40,000,000,000
50,000,000,000
60,000,000,000
70,000,000,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Investment Constant Prices Euros (GFCF) Source:World Bank
There has been no meaningful recovery in business investment since the GFC.

9. The current account deficit has
improved substantially
22/08/2021 9
-16
-14
-12
-10
-8
-6
-4
-2
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
CURRENT ACCOUNT AS A PERCENTAGE OF GDP
Source: World Bank
Greece has been in an absurd position with respect to the
Curretn account deficit up until the GFC. This has been
corrected as a result of policies adopted and represent an
encouraging development.

10. Greece – The Budget Deficit
Source: IMF
22/08/2021 10
-18.0
-16.0
-14.0
-12.0
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
Greece's budget deficits have been
unsustainable since the late 1970s.
Risks had been ignored by Greece since
the 1980s.

11. Greek General Government Gross Debt as a
percentage of GDP
Source: IMF World Economic Outlook
22/08/2021 11
213.101
0
50
100
150
200
250
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
At 213%, Greece has the highest gross government
debt to GDP of any country in the EU. By any measure
this is unsustainable and an immense constraint on
Greece. Greece's economic destiny is now dependent
on international interest rates and is a hostage to
creditors.
The IMF and OECD had been warning Greece from the early 1980s about the
unsustainability of budget policies.

12. GROSS DEBT FOR THE GREEK GOVERNMENT (GENERAL)
Euros billions Source: IMF WEO April 2021
22/08/2021 12
361.852
0
50
100
150
200
250
300
350
400
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021

13. Labour costs needed to be addressed
22/08/2021 13
50
60
70
80
90
100
110
120
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Italy Greece Germany
OECD Databank Unit Labour Costs per hour worked. 2015=100.0
Greek wages per hour worked were excessive compromising Greece's competitivgeness

14. Greece’s Current account deficit is now more
sustainable post economic reforms
22/08/2021 14
-16
-14
-12
-10
-8
-6
-4
-2
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Greek Current Account Deficit as a percentage of GDP
Prior to economic reform
implementation Greece
never achieved a
sustainable Current account
deficit in the previous
decade.

15. The Bailout
• The Global Financial Crisis of 2008 highlighted the unsustainable nature of
Greek public debt accumulated since 1974. The loss of confidence in
Greece, the inability to raise money to repay existing debt and meet
interest payments led to credit rating down grading to “junk status” and
record high interest rates on debt.
• This necessitated, Greece, obtaining a Bailout from three international
creditors—the European Union, the European Central Bank and the IMF
(International Monetary Fund) (also known as The Troika)—by signing
three consecutive Memorandums in 2010, 2012 and 2015. The
agreements required Greece to conduct rapid economic reforms. The
reforms required immense austerity measures be implemented.
• In total, the Troika provided Greece with around 239 billion Euros.
Without the Bailout Greece would have defaulted, left the Euro Zone and
the Banking system would have also defaulted and not be recognised for
the purpose of borrowing money from international lenders.
22/08/2021 15

16. Part 2. Austerity or Economic Reform
The conditions of the IMF/ECB/EU Bailout required economic reforms to be
conducted.
22/08/2021 16
Issue Austerity Reform
Unsustainable budget deficits. Significant reductions in pensions,
medical and social infrastructure.
Taxation increases.
Produce a sustainable budget
which improves investor
confidence and avoids
exacerbating public debt levels.
One of the outcomes was extreme
Hardship for ordinary Greeks with
record high unemployment.
Sale of Government assets. Initial job losses and loss of control
over Greek assets such as airports,
Air Traffic Control and Shipping
ports.
Sale prices used to reduce debt,
improved productivity in assets
sold and growth in employment
after transition period.
Labour market reforms Significant reductions in wages.
This forced many Greeks to
subsistence income levels.
Improved competitiveness and
prospects for employment growth
Deregulation of key industries
Road freight, architectural
services, engineering and
professional services
Existing vested interest have
experienced a reduction in
income.
Improved competiveness and
employment growth prospects.

17. Greek credibility is returning.
22/08/2021 17

18. The upside of economic reform – long term interest
rates have plummeted
Source: Federal Reserve of St Louis (Time series IRLTLT01DEM156N)
22/08/2021 18
-5.00
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
1997-06-01
1998-02-01
1998-10-01
1999-06-01
2000-02-01
2000-10-01
2001-06-01
2002-02-01
2002-10-01
2003-06-01
2004-02-01
2004-10-01
2005-06-01
2006-02-01
2006-10-01
2007-06-01
2008-02-01
2008-10-01
2009-06-01
2010-02-01
2010-10-01
2011-06-01
2012-02-01
2012-10-01
2013-06-01
2014-02-01
2014-10-01
2015-06-01
2016-02-01
2016-10-01
2017-06-01
2018-02-01
2018-10-01
2019-06-01
2020-02-01
2020-10-01
Greek Government 10yr bonds German Government 10yr bonds
Economic reform in Greece has brought about an immense reduction in the cost of borrowing for the Greek Government.
Bond rates of over 30 per cent during the crisis would ruin any industrialised nation. Greek government costs of
borrowing are now not significantly different from those in Germany. However, the size of the debt leaves Greece
exposed to the liekly rise in bond yields.
YIELD PER CENT

19. The pressure has eased on the Greek Government
meeting interest payments on its debt
22/08/2021 19
0
5
10
15
20
25
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Interest payments as a percentage of Total Government Revenue
World Bank Time Series GC.XPN.INTP.RV.ZS April 2021

20. So where is the meaningful recovery?
Unlike other EU nations that adopted harsh economic policies in
response to the GFC Greece has not experienced the recovery in
output that other nations have enjoyed. In fact, the output of the EU
has significantly exceeded output levels in the year before the GFC.
There are several factors that are impeding recovery. The most
significant is a lack of investor confidence (related to political
instability) and more importantly a broken banking system (loan
default rates are extremely high) not lending to business. Without
available funding it is difficult to support a solid recovery.
The situation is comparable to the situation facing Japan after a
collapse in commercial and residential property prices in the 1980s led
Japanese banks curtail lending thereby precluding small businesses
from expanding and becoming larger businesses.
22/08/2021 20

21. Precarious position of banks in
Greece
22/08/2021 21
0
5
10
15
20
25
30
35
40
45
50
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Greek Banks Percentage of Non-Performing Loans
Sources: https://www.theglobaleconomy.com/Australia/nonperforming_loans/
and World Bank Time Series FB.AST.NPER.ZS
The astounding proportion on non-performing loans seriously limits the Greek
banking system from lending money to the private sector for investments and
business operations. This in turn limits economic growth and employment . This
situation is analogous to that in Japan from the late 1980s. Australian non-
performing loans are about 1 per cent of total loans.
The financial sector can not be supportive of
the private sector. Business simply can not rely
on loans from the banking system to grow.
Also keep in mind that the Greek public sector
contributed to the devastation of the banking
system. Greek Government Debt owned by
the banks was written down thereby reducing

22. The state of the Greek banking system is woeful compared to other EU nations. This is a
major constraint to a return to higher rates of growth and more employment.
22/08/2021 22
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
France Germany Italy Ireland Portugal Greece
Bank nonperforming loans to total gross loans
(%)
Source: World Bank Data Accessed 29th June 2021

23. If the Namibians can get a result why
can’t Greece?
• The loan including interest has been valued at around $USD 70 Billion. This is NOT
a reparation issue. This is an outstanding commercial loan that was made by
Greece for which there is evidence of interest payments and loan documentation
for which Germany has not paid the principal or interest.
• According to discussions held with Greek Minister of Finance Mr Christos
Staikouras on 16th March 2021 the Greek Government General Accounting Office
(GAO) “dealt methodically for the first time in history” on this issue. According to
Minister Staikouras, the process was “completed in March 2013”. The historical
documents and assessments were forwarded to a committee made up of the GAO,
Bank of Greece and PDMA which assessed Greece’s claims. The Committee was
set up by Minister Staikouras at that time.
• The report of the Committee was provided to the Greek Parliament on December
30th 2014”.
• Although Minister Staikouras said this report is on the public I have been unable to
locate it despite repeated attempts.
• Minister Staikouras emphasised that there are sensitivities involved and that
“Greece has not given up”.
22/08/2021 23

24. Part 3. There was never any realistic
“Plan B”.
• The inside story:
• After Greece failed to implement economic reform connected to the first
bail out Germany/Merkel wanted Greece not only out of the Euro
currency system but also out of the EU.
• Fortuitously for Greece, at around a most critical time Tim Geithner (US
Treasury Secretary, Obama Administration) was doing a tour of Europe
and visited Merkel. Merkel advised Geithner of German intentions.
• Geithner reported back to Obama and on the basis of the US wanting to
avoid instability in Southern Europe (Russian influence) banded together
with the IMF and France to successfully block German intentions.
Ultimately, Greece narrowly avoided having to default as well as being
thrown out of the Euro zone and even the EU. In exchange, Greece was
compelled to adopt policies to reform its economy. The same policies that
the OECD and IMF had been urging Greece to adopt for the previous three
decades.
22/08/2021 24

25. A default would have meant Greeks would be using Drachma
bank notes with lots of zeros….
Ongoing depreciations, strikes, unreliable supply of imports
(including pharmaceuticals), a broken banking system that
would have difficulty facilitating trade and interest rates that
would force most of Greek industry to fail
22/08/2021 25

26. The path (narrowly avoided) to a failed state was never really
explained to Greeks by the Greek main stream media or Greek
Parliamentarians…...
• The chain reaction of a Greek Government default and
its consequences is the very reason why a default was
never viable. The often advocated Plan “B” meant
defaulting and adopting the Drachma. This would have
been more catastrophic than the Bailout policies and
hence was never really an option.
• The cost to Greeks of the Bailout Policies adopted was
without parallel and inflicted a harsh reduction in
incomes, employment and damaged the social fabric of
a People. When a nation does nothing for decades to
make its own economy viable and allows corrupt
practices to exist the adjustments that then need to be
done are immense.
22/08/2021 26

27. PLAN “B” A BRIEF DESCRIPTION OF HOW THIS
WOULD HAVE PLAYED OUT.
• The Greek Government defaults on interest payments and principal payments.
• The Greek Government including all institutions and entities both public and
private are also considered to have defaulted.
• The European Central Bank cannot conduct business with any defaulted entity
including the Greek Central Bank.
• The ECB can no longer support the Central Bank of Greece by way of loans and
participation in the Euro System.
• Greece ceases to be a member of the Euro and reverts to Drachmas.
• Greek banks are no longer viable without the ECB’s support of the Central Bank of
Greece.
• Greek Banks can no longer be considered viable as no Bank in Greece meets Basle
capital adequacy standards once non-performing loans are accounted for. Greeks
banks have zero capital and do not meet capital adequacy requirements.
• Greek banks will have difficulty raising funds internationally, issuing letters of
credit to facilitate international trade and any other banking activity outside of
Greece.
• The introduction of the Drachma will result in major and ongoing depreciations.
Inflation will accelerate to levels difficult to imagine. The higher levels of inflation
will be devastating.
22/08/2021 27

28. The chaos continues…..
• Higher Greek inflation will create demands for wage increases and in turn given union strength in Greece
will result in not only civil unrest and strikes but further inflation. A vicious inflationary cycle is likely to
ensue.
• Higher inflation will result in even higher interest rates on existing loans both commercial and domestic.
Current levels of non-performing loans will rise significantly higher. A total collapse of the banking system
could be avoided by the Greek Government “printing more money” however, this would only add further
to inflationary pressures.
• Additional risks arise with the Greek Budget. Greek budget deficits would not be funded from overseas
investors (due to Greece having defaulted) and the Government would need to print more money. That
would add to existing high inflation and interest rates.
• Higher Interest rates would lead to a further collapse of investment and employment in Greece. The
extent of economic devastation higher inflation, higher interest rates and a loss of confidence of investors
in Greece would be immense.
• Greeks would avoid holding Drachmas and an informal economy based on US Dollars and Euros would
ensue. Similar to the situation in Argentina, Zimbabwe and Venezuela.
• The expected boost to the Greek economy from the depreciation and ensuing recovery was an extremely
high risk assumption. A depreciation driven boost to an economy’s competitiveness essentially means
that wages do not rise in response to the initial imported inflation. Since a rise in wages will lead to more
inflation and this will reverse any improvement in competitiveness.
• In Greece’s case it is very unlikely given the propensity of unions and citizens to strike to expect wages not
rising strongly in response to imported inflation.
• The downward economic spiral would take Greek pensioners that would not be able to obtain
pharmaceuticals, marginal businesses currently surviving on account of the stability in interest rates and
currency bestowed upon Greece by the Euro, and ruin the savings of those now holding Drachmas.
• You can continue to highlight the risks but the readers of this presentation should have a better idea of the
consequences of a Greek Government default.
22/08/2021 28

29. Plan “B” or no Plan :B”
• Greece still had to adopt the policies advocated
by the IMF/EC/ECB/OECD and others for decades
• Including-
• Reduce the budget deficit
• Reform the pension system
• Improve competitiveness
• Address waste and a lack of transparency
• Deregulate the economy and sell government
assets.
22/08/2021 29

30. Part 4. A GREEK REALITY CHECK AND RECOVERY
PROSPECTS
• Greece is not a super power.
• The EU, ECB and IMF do not owe Greece
anything.
• Greece does not have the economic leverage
that many Greeks thought or think Greece had
after the GFC.
• The path to recovery means Greece addresses
established weaknesses in the economy.
22/08/2021 30

31. The popular narrative in the Greek media and the political
parties was that the TROIKA was to blame. Or was it?
Greece’s responsibility to manage it’s own economy over three
decades was never a focal point or politically correct.
22/08/2021 31

32. Greeks were demonstrating
against the wrong TROIKA!
• The TROIKA of the International Monetary Fund (IMF), European Central Bank
(ECB) and the European Commission (EC) were pursuing a path of ensuring
that economic reforms took place in Greece so that Greece would remain a
viable EU state, became competitive, managed its own finances, ensured that
the banking system was stable and pay its debts.
• The real TROIKA Greeks needed to demonstrate against avoided exposure.
Specifically, 1. a black economy representing about 30 per cent of economic
activity combined with tax evasion, 2. corruption also known as a lack of
transparency in Government and 3. a political system that grants itself
effective immunity from criminal prosecution.
• If the real TROIKA had been pursued by Greeks in the previous three decades
Greece would have never needed a bail out. Greece could have been a centre
of economic dynamism ad influence in the Balkans. However, many benefited
from the entrenched black market, corruption and waste. Many benefited
and many avoided the consequences (such as budget deficits and a lack of
competitiveness) as long as international investors lent money to Greece to
pay for the budget deficit. This enabled Greece to avoid confronting its
underlying economic problems - the real TROIKA!
22/08/2021 32

33. The Lagarde List was an indictment on Greek Parliamentarians and a
testament of entrenched corruption .
22/08/2021 33
Herve Falciani Christine Lagarde Journalist Vaxevanis
The Lagarde List Minister
Papaconstantinou

34. 22/08/2021 34
Time line of deliberate inaction.
- In 2008, whistle blower Hervé Falciani leaks financial information on130,000 suspected tax evaders with accounts
at the HSBC Bank in Geneva. Subsequently, Falciani is pursued by the Swiss and French Judiciaries for criminal
conduct (theft of financial information/violating bank secrecy laws and espionage). Falciani eventually avoids
extradition in Spain.
- Falciani’s list finds its way to the ex-French Minister of Finance Christine Lagarde. Lagarde, then sends spreadsheet
data to the relevant Ministers in the various countries in which the account holders reside. Falciani’s list is now
referred to as the Lagarde List.
- Relevant Greek Ministers and officials take no action on the list. Several account holders are connected to Greek
Parliamentarians.
- Kostas Vaxevanis, independent Greek journalist publishes the Lagarde List. Not surprisingly, Greek Parliament and
the Greek Judiciary pursue Vaxevanis for breaking privacy laws after publishing the names of 2,059 suspected tax
dodgers.
- There is protracted inaction on pursuing and determining the amount of tax revenue denied to the Greek state.
The Greek Minister of Finance George Papaconstantinou deletes the names of three people on the list he has
connections with.
- By 2015, Papaconstantinou is exonerated by a special Tribunal over his handling of the “Lagarde list” of wealthy
Greeks with secret bank accounts abroad. Charges of felony and tampering with the document are dropped.
Instead Papaconstantinou is found guilty of a misdemeanour and walks free.
- By 2018 The head of Greece's Independent Authority for Public Revenue admitted on Monday that tax
authorities can no longer investigate the so-called Lagarde list for possible tax evaders, following two decisions by
the Council of State last year. In June 2017, the administrative court ruled any tax audits conducted that stretch
back beyond a five-year limit are unconstitutional. Greece’s Parliamentarians/Institutions dragged this out long
enough so that statutory limitations were exceeded.

35. The effects of the black economy on
Greece’s debt situation
• The failure of the Greek Government to address
the black economy is a significant factor in
ongoing budget deficits and the accumulation of
Government debt that has crippled Greece.
• The failure of both major political parties to
address this suggests that Greek Parliamentarians
themselves are conflicted and are not
representing the interests of Greece as a whole.
• A failure of this magnitude over a period of
several decades has had catastrophic
consequences.
22/08/2021 35

36. Greece has the second largest black market in the Organisation for Economic Cooperation and Development
A massive 27.5 per cent of the economy is untaxed. This has a dramatic effect on Government revenue shortfalls and
ultimately debt levels. Note that Italy, Greece, Portugal and Spain have large black markets and also very high levels
of debt.
Source: https://documents1.worldbank.org/curated/en/311991468037132740/pdf/WPS5356.pdf
22/08/2021 36

37. DEBT CONSEQUENCES OF GREECE’S FAILURE TO ADDRESS THE
BLACK ECONOMY TAX EVASOIN UPON GOVERNMENT DEBT
AND THE BUDGET DEFICIT.
• Using conservative assumptions on calculating the effect of failing to address the black
economy highlights the grave consequences of inaction by major political parties in Greece.
• See spreadsheet for calculations.
• Assumptions:
• Company tax rate of 20 per cent for simplicity of calculations
• The taxation office had managed to only capture ONE QUARTER of black market activity
estimated at 27.5 per cent on average by the OECD.
• Interest costs and compounding effects have been excluded. Including these effects would
demonstrate the horrendous consequences of inaction on addressing tax evasion in the black
economy in Greece.
• OUTCOME
• Under conservative assumptions, Greek failures to address the black market between 1990
and 2019 alone, have resulted in a loss of tax revenue of 99.7 billion Euros. This represents
28 per cent of Greece’s total gross general government debt outstanding of 360 billion
Euros. This excludes funding costs which would greatly exacerbate these figures.
• The black economy alone has been a key factor that has resulted in Greece descending into a
woeful state of affairs. Tax evasion of registered business and the professional class have
greatly exacerbated Greece’s very poor public finances. According to the World Bank in 2005
53.2 per cent of firms did not report all sales for tax purposes (Source: World Bank April 2021
Time series IC.FRM.INFM.ZS. This has likely fallen due to electronic payments replacing many
cash transactions.
22/08/2021 37

38. The nature of the financial disaster self inflicted by Greeks
upon Greece is immense.
• Similar calculations can be made for government waste in pharmaceutical
payments for non-generic drugs and corrupt practices that result in
inflated prices being paid by the government to purchase defence
equipment and other goods and services.
• According to The Greek Minister of State for Combating
Corruption, Panagiotis Nikoloudis, recently found that all contracts
concluded between the Greek state and companies included kickbacks
amounting to 2-2.5 percent of the total contract. Public officials received
commissions of up to 4 percent of the amount of the contract in dealings
involving the purchase of weaponry (Greek Reporter, Apr. 2015). Source:
http://www.business-anti-corruption.com/country-profiles/europe-
central-asia/greece/show-all.aspx
• These activities are pervasive irrespective of who is in government. The
beneficiaries are Greece’s own cleptocracy and/or their political
associates.
• The size and breadth of corruption can not exist without tacit general
public and political acceptance.
22/08/2021 38

39. Greek Parliamentary Immunity from prosecution
Source: THE PROBLEM OF POLITICAL IMMUNITIES IN GREECE Ioannis Androulakis, Lecturer in Criminal Law & Criminal
Procedure, University of Athens Attorney at Law
“Article 62 of the Constitution, which apart from the functional immunity just mentioned, establishes the
general rule that for the duration of the contemporary parliamentary period, it is the plenary of the Parliament,
as a body, that will decide whether to give its authorization for one of its members to be prosecuted and tried
for any kind of crime, including crimes of corruption.” (Androulakis, A. page 2)
“The problem is that MPs appear in most cases reluctant to vote for the lifting of the
parliamentary immunity of their colleagues.” (Androulakis, A. page 2)
“The lifting of ministerial immunities is extremely rare. To give one figure, of 89 felony cases
against ministers sent by prosecutors to Parliament between June 2012 and May 2014,
immunities were lifted only once. The procedure is cumbersome, formalistic and time consuming.”
Androulakis,A. page 3)
“The most controversial issue, however, regarding the application of the above
provisions is the fact that according to article 86 par. 3 of the Constitution, all the
investigative and prosecutorial procedures I mentioned have to take place until the end of the
second session of the parliamentary period starting after the commission of the alleged
offence. Otherwise the offence cannot be prosecuted and becomes in a sense time-barred. This
provision effectively rules out any possibility of effective prosecution.” (Androul;akis, A. page 3
The corruption within the Greek Parliament has contributed to the waste of public money, a failure to
effectively collect revenue and inaction on deregulating many aspects of the reform. The adoption of the Bail
Out reforms has forced the Greek political system to adopt policies that otherwise would never have been
adopted.
22/08/2021 39

40. Transparency in Government is necessary to ensure
corruption is addressed, wastage is reduced and the
economy performs like an developed nation.
Corruption Perceptions Index 2020: Global Scores
Source:https://www.transparency.org/en/cpi/2020/index/nzl
Country Corruption Rank
Perception Index
Denmark 88 1
New Zealand 88 1
Germany 80 9
Australia 77 11
Canada 77 11
United States of America 67 25
Botswana 60 35
Rwanda 54 49
Italy 53 52
Saudi Arabia 53 52
Malaysia 51 57
Namibia 51 57
Greece 50 59th place out of 179 nations
Jordan 49 60
Slovakia 49 60
Belarus 47 63
Croatia 47 63
Somalia 12 179
South Sudan 12 179
22/08/2021 40

41. There have been many improvements
subsequent to the GFC
• The taxation system has become significantly more electronically
based and data matching has improved.
• The ability to own bank accounts without monitoring and visibility
of ownership has improved immensely.
• According to the World Bank in 2005, 55.9 per cent of Greek firms
expected to provide gifts to public officials. By 2018 this had
dropped to 1.7 per cent (Source World Bank, April 2021 Time Series
IC.TAX.GIFT.ZS)
• Similarly, the World Bank stated that in 2005, 21.6 per cent of Greek
firms expected to make informal payments to public officials. By
2018 this had dropped to 5.2 per cent (Source World Bank, April
2021 Time Series IC.FRM.CORR.ZS)
• It must be noted that many reforms have been the result of EU,
IMF, OECD and EC recommendations.
22/08/2021 41

42. NAMIBIA (a western African nation) and
GREECE
Some strange parallels and inferences
• Namibia, Africa May 28, 20218:52 AM AEST
• Germany has agreed to fund projects in Namibia worth more than a billion euros over 30
years to atone for its role in genocide and property seizures in its-then colony more than a
century ago.
• Thousands of Herero and Nama people were killed by German colonial forces between 1904
and 1908, after the tribes rebelled against German rule in the colony, then named German
South West Africa. Survivors were driven into the desert, where many ended up in
concentration camps to be used as slave labour and many died from cold, malnutrition and
exhaustion.
• Source: Germany colonial-era genocide reparations offer not enough – Namibia vice
president | Reuters
• Namibia has demonstrated the ability of a nation to pursue its claims against a colonial
power after an extended period of time has elapsed.
• Namibian determination and negotiations stretching back six years delivered a result. The
issue is what has Greece achieved in the matter of a Loan from Greece to Nazi Germany on
commercial terms during WW2? The loan and interest rates remain outstanding.
22/08/2021 42

43. The performance of Greece in pursuing this matter goes to the core of
Greece’s failures both economic and in terms of foreign policy.
Why does it take almost 70 years for Greece to compile an complete
analysis of a commercial loan from Greece to Germany?
Why is it that the report is delivered to Parliament on New Year’s Eve
2014 and the report is not available?
What precisely has been done in the ensuing years?
There is no doubting the professionalism and competence of Greece’s
Minster of Finance, Mr Staikouras. However, Germany’s commercial
debt to Greece is typical of Greece’s:
1. Failure to pursue it’s national interests in a determined in manner
(unlike Namibia).
2. Failure to make relevant documents public. This is another
example of a lack of transparency.
3. Failure to negotiate on an ongoing basis and initiate legal action.
4. Failure of major political parties to adopt a common line to pursue
a key national issue.
22/08/2021 43

44. Namibia could show the way for
Greece
• Greece will need to pursue this matter over an extended period. This could be 6
years as in the case of Namibia or decades. Inaction is not a solution.
• Greece could obtain the principal and interest payments over an extended period
(30 years in the case of Namibia) such as 50 years.
• Greece could negotiate a variety of infrastructure projects with Germany for which
German companies are given extended leases over new assets such as ports,
tollways thereby mitigating the cost to German taxpayers.
• Some other combination of payments. Possibly waving interest payments that
Greece is liable for over an extended period. This would relieve Greece’s current
debt servicing.
• The options and timing for resolving this issue are many.
• It is crucial that Greece pursues this to at least achieve some kind of a result.
• Ultimately, the report to Greece’s Parliament needs to be made public for input
from other legal and financial analysts. This needs to be done to at least
demonstrate a level of transparency on such a crucial issue.
22/08/2021 44

45. Was the GFC a good thing for Greece?
• This is a question that will infuriate many Greeks.
Principally those that have seen their incomes
slashed and experienced immense financial and
social suffering that has taken place.
• However, the GFC exposed Greece’s many
economic failures and lack of transparency
(corruption). Ultimately, it is best to have these
failures exposed sooner than later. Continuing to
address these failures will improve Greece’s long
term prospects and viability.
22/08/2021 45

46. Conclusions
• Greece is in its current situation principally on account of Greek economic mismanagement,
waste, tax evasion and corruption. The old status quo suited a select few Greeks and this was
paid for by debt owed by all Greeks.
• The path to economic recovery will be long and drawn out and many risks remain.
• Greece is gradually winning back its credibility and delivering sounder economic
fundamentals. This has come at a great cost to ordinary Greeks. Many of whom have now
left the nation for employment in Germany, UK, US, Canada, Australia and many other
nations.
• There was never an Option “B”. Defaulting would have wounded the economy in a fatal
manner and caused greater harm to the economy than the path now being pursued. Option
“B” failed to highlight the extreme risks associated with a default on Greek Government
Debt. Option “B” also failed to highlight that even under a scenario of defaulting Greece
would still need to have initiated the same economic reforms.
• Greece needs to pursue tax evasion, German debts to Greece, address waste and corruption
and accept the need to become a transparent and competitive nation. The sooner this is
done the sooner Greece can become a force in the Balkans.
22/08/2021 46