German tax collectors volunteer for duty in Greece

BERLIN Sat Feb 25, 2012 10:47am EST

Related Topics

BERLIN (Reuters) - More than 160 German tax collectors have volunteered for possible assignments in Greece to help the struggling Mediterranean country gather tax more efficiently, the Finance Ministry in Berlin said on Saturday.

The offer risks fuelling resentment among Greeks who have already reacted angrily to earlier German calls for the appointment of a "budget commissioner" to monitor the Greek government's management of its finances.

German media published news of the possible tax advice mission two days before the German parliament is due to vote on whether to endorse a new 130 billion euro ($175 billion) bailout package for Greece.

International lenders say the public debt burden that forced Greece to seek a bailout two years ago has burgeoned partly because many Greeks evade the tax net.

The German government says it wants to help Greece develop a modern tax administration and has started recruiting volunteers for Greek duty. More than 160 German tax officials with English language skills have signed up and about a dozen also speak Greek, a spokesman for the finance ministry said.

The respected magazine Wirtschaftswoche quoted finance ministers in two states, North Rhine-Westphalia (NRW) and Hesse, saying they were ready to send German tax officials to Greece even though it was unclear whether such assistance was wanted.

"Greece's problems today are even worse than the problems faced with former East Germany in 1990," said Norbert Walter-Borjans, NRW finance minister, referring to the period after German unity when west German tax officials went to the ex-Communist east of the country to help improve tax collection.

"There was resistance then among some eastern Germans against western (tax collectors) but that's nothing compared to the reservations Greeks will have against Germans," he added.

German criticism has reopened wounds in Greece dating back to World War Two. Protesters in Athens burned a German flag earlier this month and Greek newspapers have portrayed German Chancellor Angela Merkel in Nazi uniform.

"BOTTOMLESS PIT"

The Germany finance ministry spokesman said the preparations for a tax advice mission were being made under the auspices of the European Union and International Monetary Fund. He said it was unclear when or if the German civil servants would be deployed.

Germans, who are making the largest financial contribution to the euro zone bailout for Greece, are growing increasingly impatient with what Finance Minister Wolfgang Schaeuble described as a "bottomless pit" in Greece.

At the same time, there is a growing awareness in Germany, Europe's leading economy, that its own prosperity is at risk as the debt crisis sucks in other countries and stifles demand within the currency bloc for German exports.

But a recent flurry of acrimonious exchanges between Athens and Berlin reflect deepening doubts among mainly northern members of the 17-nation euro zone about Greece's ability and willingness to overhaul its economy to satisfy lenders' demands.

Schaeuble and other German government leaders have repeatedly offered to help Athens improve tax collection and he has complained the offers have not been accepted.

A report by the European Union's task force in November said that Greece has 60 billion euros in unpaid taxes due to tax avoidance and lack of compliance - an amount equal to around 25 percent of Greek gross domestic product (GDP)

Last month the Greek government published a list of 4,000 top tax dodgers including a famous singer and basketball star as part of a new policy to get evaders to pay up.

Most of the German tax collection volunteers come from NRW, Germany's most populous state, Wirtschaftswoche said. But Hesse, one of the country's richest states where the financial capital Frankfurt is located, has also recruited many volunteers.

"When it comes to helping Greece we should also think about the possibility of re-calling retired German tax collectors who had experience helping (east Germany)," Hesse's finance minister Thomas Schaefer said.

($1 = 0.7428 euros)

(Reporting By Erik Kirschbaum; Editing by Ruth Pitchford)

FILED UNDER: