Der Spiegel: Hundreds of Billions Flowing Illicitly Out of Greece
September 4th, 2012
September 4th, 2012
This week, the influential German magazine Der Spiegel published a report based on research from Global Financial Integrity, which found that $261 billion in illicit money flowed out of the country from 2003-2011. The summary (in German) is available here.
Task Force Director Raymond Baker, who also directs Global Financial Integrity, commented in the article, noting that Greece’s deep recession likely contributed to the outflows, “In a recession, it will be harder for individuals and companies to get loans. This attracts illegal funds, which will close the gap.” Mr. Baker also remarked that illicit investors were likely buying up Greek real estate.
The article comes just after former Greek Prime Minister George Papandreau commented on how tax havens are helping to destroy the Greek economy in a speech last week,
Papandreou told the opening of Socialist International’s four-yearly conference that $21 trillion was hidden in tax havens around the world.
“Whether it is in developed or developing nations, it is our citizens that are being robbed,” he said, saying this “plain robbery” denied governments the capacity to invest in areas like welfare and education.
“I know this, Greece is suffering from this. Had this alone been tackled, Greece would have most likely never have needed a bailout.
“Yet Europe, the G8, G20, the banking system despite my pleas as prime minister, despite token reference in our council of G20 decisions, have done nothing to change this.”
Greece’s finance ministry in February said Greeks had legally moved €16bn (£12.7bn) abroad in the past two years, while efforts to clamp down on tax evasion have met limited success.
There’s a lot on the ground that the Greek government and people need to fix about their economy, but other things are outside of their control. Even if they did everything they could do get their domestic house in order, it would still be relatively easy for a Greek citizen to move money abroad via tax havens. These same offshore centers are not only causing havoc on Greece, but significantly contributing to the looting of the developing world. The G20 needs to act, to establish automatic information exchange, and help clamp down on the global system that facilitates tax evasion.