The following article was originally published in German and has been translated by JLH. It concerns the final push by the Greek financial authorities, who themselves are under pressure from the Troika, to crack open the banking system and expose it to the full view of those responsible for collecting delinquent taxes.
JLH includes this introductory note:
Greece is one of the two EU countries in which an elected head of government has been removed by fiat and a new, approved one appointed or elected. The other is Italy, which is demonstrating its own, unique reaction to this manipulation.
Greece has seen the rise of a fairly clearly fascist party to new prominence, while the “approved” administration is attempting to meet both the needs of its society and the demands from the EU.
This recent move on bank accounts might be seen as similar to the US RICO statute, and approved by many, or as a first step in total government control of private wealth.
Europe is a fascinating study in centrifugally opposed, chaotic forces, straining to break free of a mindless bureaucracy.
The translated article from Griechenland Blog:
Greek Ministry of Finance Gains Access to All Bank Accounts
March 1, 2013
The Greek Ministry of Finance intends to gain direct access to all Greek bank accounts via electronic interconnection with the banks.
The Ministry of Finance in Greece is requiring expedited service to open bank accounts of all taxpayers who are suspected of tax evasion, corruption. moving or “laundering” money, as well as illegal profiteering.
After the devastating report of the Troika[1] on the disappointing results of the mechanism for supervising and collecting taxes, the economic staff is accelerating its actions in combating tax evasion and in supporting tax collection. On February 27, 2013, the Prime Minister went so far as to convene a conference with the political leadership of the Ministry of Finance in which an immediate improvement in the effectiveness of tax administration was demanded. Minister of Finance, Giannis Stournaras, ruled out the possibility of changes in the role of the department of economic criminal activity (SDOE).[2]
Removal of Banking Confidentiality Within 24 Hours
Specifically, the Ministry of Finance is introducing the interconnection of tax authorities with the banks and therefore — by removing banking confidentiality — putting an end to the hesitations and obstacles that have been observed. Within 2013, the agency for tax supervision will receive direct access to the bank accounts of those suspected of tax evasion or money laundering.
With a legal regulation that will soon be presented to parliament, the banks will be required to respond within 24 hours to requests of examiners concerning disclosure and surveillance of transactions in the accounts of taxpayers under scrutiny.
Big Brother Gets An Electronic Eye in the Banks
The Ministry of Finance’s plan envisions the creation of an application which will connect the computerized systems of the tax examination mechanism with the computerized systems of the banks. All requests of the SDOE, finance agencies and supervisory authorities regarding inspection of the bank accounts of surveilled taxpayers will be assembled and electronically transmitted to the banks. The banks, for their part, will be obliged to reply immediately — that is, the next day — with all desired data. In this fashion, requesting of the data and examination for tax purposes will be accomplished with all possible speed.
Meanwhile, the SDOE has already demanded the opening of more than 4,000 bank accounts, but not even half of them were disclosed. Officials of the SDOE accuse the banks of unwillingness and procrastination in their response to the requests. They say the disclosure of accounts of people under suspicion for tax evasion and economic crimes can take from eight months to a year.
Observation of All Account Movements in Real Time
In a second phase, the electronic connection of the Ministry of Finance and the banks will allow observation of movements in bank accounts of all taxpayers in real time, so that any movement of significant size which is considered “suspicious” will be immediately overseen.
The Ministry of Finance introduced the plan for the connection of the supervisory mechanisms and the banks in an announcement intended to answer the complaints in the Troika report about delays in implementing measures to combat tax evasion and to re-structure the tax agency.
The announcement also presents initiatives already introduced, such as, inter alia:
- In January, the collecting of debts due rose by 70%.
- The regular examination of large firms in February was more than double that in January and inspection of taxpayers with great wealth was tripled.
- The scrutiny of foreign transfers made by Greek taxpayers in the years 2009-2011 is in full swing.
- The examination by the SDOE of the “Lagarde list,” encompassing 2,063 cases has begun with the identification of 1,682 “natural” and 40 “legal” persons.
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Definitions from the Griechenland Blog:
* Troika: Greekspeak for the European Commission, the European Central Bank and the IMF. ** SDOE: Literally, Unit for Prosecution of Economic Criminality, colloquially known as “Tax-Rambo.” Re-named and re-organized in 2004, it is still referred by its original title. It was founded in 1997, with comprehensive authority, (not to say absolutely idiotic license).
Troika = Germany, France and Belguim, who, taken together, are the actual, dominant, creditors of Greece. They can’t be so explicitly named so ‘Troika’ will have to do.
IMF = Founded to handle German WWI war reparations. As you might expect, now that Germany has paid off that ‘nut’ the IMF has morphed into Impossible Monetary Finagling. It’s barons (heads of every central bank) meet every two months to a vast repast in Greeco-Roman splendor.
EURO = A rigid exchange rate scheme that echoes prior gold and silver standards of generations past. There is absolutely no such thing as a “EURO” — in reality, as per the treaties, we have:
German Euros
French Euros
Dutch Euros
Spanish Euros
Greek Euros
etc.
This reality is why the EURO zone is even in the news. If Greek (printed) Euros were the exact same as German (printed) Euros then Athens need only spit them out and hand them over.
But, they’re not. Berlin wants to be, ultimately, repaid in German Euros.
Athens, as it is currently run, can’t earn those (German) Euros. It can’t even earn the French Euros nor Belgian Euros in borrowed — at the sovereign level.
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The o n l y differences between the current rigid exchange rate system and the old gold standard: all of the nominal currencies entered the deal on a 1:1 exchange rate and the actual interposition of specie has been eliminated.
Financial historians would remind you that e v e r y rigid exchange rate system — so popular with mercantilst oriented finance ministers — blows up.
In mercantilist philosophy there is a ‘magguffin’ — say gold or silver — that, once cornered, means that you’ve won the ‘game.’ A true mercantilist then expects a pat on the back, a medal, and the salutations of his countrymen. It’s what you get when you take a petty merchant’s view of the global economy.
Of course, at a global level, the game utterly breaks down. When that happens, we call it warfare.
This is already a reality in Germany. As few would suspect, who know about the German government’s rows a.o. with Switzerland over their banking secrecy helping tax evaders, Germany, too, had pretty strong legal protection for the confidentiality of bank-customer relations. Tax authorities could only get information after obtaining a court order. I forgot the year when that changed, 2008 or 2009, but put into effect from Jan. 1st. Since then it is even required that banks deploy software which enables tax authorities to query accounts without bank or customer even noticing. But of course people are still criminalized for not reporting, even though all data is now available at the push of a button. They could save everyone the annoying paperwork and simply send the bill. But that would bee too simple, and where’s the authoritarian fun in that? There was a very subdued outcry when this came out, but nobody’s talking about it anymore. Oh by the way, just a few weeks later another law was enacted meant to help the ailing local crafts and trades, that allows us to deduct their bills from taxable income, but only when paid by bank transfer, not in cash. Go figure? And nobody seems to find this even a little strange. I used to work in making software for banks, mostly in risk management, and I could have gotten involved in this project for a handsome compensation. I found it so bone chilling that I chose to quit instead, and I’ve been poor ever since. I am content, my family is not.