From the Tax Justice Network blog:
Misha Glenny has a good article in the FT today:
As the new Greek government struggles to convince Europe of its resolve to cut the country’s bloated public sector, it also has to decide whether to face down the real domestic threat to Greece’s stability: the network of oligarch families who control large parts of the Greek business, the financial sector, the media and, indeed, politicians.
The oligarchs have responded predictably: by accelerating their exports of cash. In the last year, the London property market alone has reported a surge of Greek money. And then there’s this, of course, not strictly a core tax justice issue, but these things are all intertwined:
Their aim is clear – they are waiting to pounce on the state assets which, under the various bail-out plans, the Greek government must privatise. The oligarch conglomerates are waiting to scoop them up at anything up to less than a fifth of their real value – a poor financial return for the state but in 5-10 years time a bonanza for the purchasers. Some have been even banking on Greece exiting the euro so that they can then use the billions of euros squirrelled away outside the country to purchase the assets for knock-down drachma prices.
We’ve seen this pattern in country after country, particularly since the 1970s.
And so the dance goes on.
Now a longish quote from Treasure Islands:
“Financial deregulation and globalisation? Offshore is at the heart of the matter, as we shall see. The rise of private equity and hedge funds? Offshore. Enron? Parmalat? Long Term Capital Management? Lehman Brothers? AIG? Offshore. Multinational corporations could never have grown so vast and powerful without tax havens. Goldman Sachs is very, very much a creature of offshore. And every significant financial catastrophe in the world since the 1970s, including the latest global economic crisis, is very much an offshore story. The decline of manufacturing industries in many advanced countries has many causes, but offshore is a big part of the tale. Tax havens have been central to the growth of debt in our economies since the 1970s. The growth of complex monopolies in certain markets, or insider trading rings, or gigantic frauds, almost always involve secrecy jurisdictions as major or central elements
This is not to say that all of these problems don’t have other explanations too; they always do. Tax havens are never the only story, because offshore exists only in relation to elsewhere. That is why it is called offshore. Without understanding offshore, we will never properly understand the history of the modern world.
For the record, Glenny gives Papandreou considerable credit for at least trying to fight against these interests.
For Greece, the big question is whether after Mr Papandreou, the country possesses the requisite political talent and vision both to introduce root-and-branch reforms in order to revive the cankerous institutions of state, and to halt the pillaging of the Greek economy by its wealthiest and most powerful citizens. This is something that the country’s international creditors might wish to ponder, too.
To make matters worse, the Swiss are hoping to sell them a deal whereby those elites get to cement their secrecy, while paying almost no tax, and politicians in Greece and elsewhere are falling for it. It makes you want to weep.
Disclaimer: Unless specifically stated to be the views of the Financial Transparency Coalition, the opinions expressed on this blog are solely the opinions of the individual blogger and are not necessarily those of the Financial Transparency Coalition.