Greece's Inaction Over Wealthy Tax Evaders Fuels Fire

After the eurozone provided billions in bailout loans to Greece in December, the prime minister declared a new beginning for his country, despite a third year of wage cuts and tax hikes. But a scandal over a list of wealthy Greeks with Swiss bank accounts is roiling the country's fragile government.

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Greece has had a turbulent 2012 with frequent protests, two elections, and predictions that the country would ditch the euro. After the eurozone provided billions in bailout loans last month, a Greek prime minister declared a fresh start for his country. But a scandal over a list of wealthy Greeks with Swiss bank accounts is roiling the country's fragile government. Joanna Kakissis reports.

JOANNA KAKISSIS, BYLINE: In 2009, French authorities discovered the stolen details of about 100,000 Swiss bank accounts. The French finance ministry, then led by Christine Lagarde, used the information to collect the equivalent of about $1.5 billion in unpaid taxes. The Lagarde list - as it's now known - was then shared with other European countries. Spain, Italy and Great Britain also used it to go after tax evaders. But Greece did not, says Nick Malkoutzis, a newspaper editor and analyst in Athens.

NICK MALKOUTZIS: And what we saw in Greece was that this list was passed around from finance minister to the financial crime squad, and then back again; and so on. And no one really did anything with it.

KAKISSIS: No one is surprised the list was not investigated since tax evasion, especially by the wealthy, has been a problem here for years. Former finance ministry official Diomidis Spinellis says the country loses billions in revenue every year because of corruption and loopholes in tax law.

DIOMIDIS SPINELLIS: If it's vague, if it can't be interpreted in various ways, those who are corrupt will exploit it.

KAKISSIS: Many Greeks also feel exploited by politicians. The public didn't even know the Lagarde list existed until the middle of last year. Last October, as speculation mounted over who was on the list, magazine editor Kostas Vaxevanis published what he says are the roughly 2,000 names on it.

KOSTA VAXEVANIS: (Through translator) The bosses of our politicians are on this list - industrialists, media magnates, those who influence laws, and take money out of the country. They're all there.

KAKISSIS: The Greek state arrested Vaxevanis, and tried him for privacy violations. He was acquitted, though he faces a retrial. Greeks have since hardened their belief that politicians are shielding the wealthy and well-connected from the taxes crushing the middle class, says Nick Malkoutzis.

MALKOUTZIS: There is a sense - very much - over the last couple of years that the burden of the crisis is being carried by the majority of the population, and the minority's getting away without paying anything. And I think people want to see that rectified.

KAKISSIS: One finance minister, George Papaconstantinou, is accused of tampering with the Lagarde list and could face criminal charges. Political science professor Thanos Veremis says he hopes any investigation into the list, and how it was handled, is thorough and fair.

THANOS VEREMIS: Well, if it isn't fair, God save us. Then it will be a witch hunt. People are mad, and they hurt economically. And obviously, they're after blood.

KAKISSIS: Part of Greece's problem, Malkoutzis says, is that institutions have failed.

MALKOUTZIS: It's always relied on personalities and individuals having to do things, rather than having a proper process in place. And I think that's the best thing that we can hope to come from this- is that we fix those weaknesses in the system because otherwise, we'll never be able to move forward.

KAKISSIS: The Lagarde list fiasco has prodded the government to move forward on investigating tax cheats. It's now scrutinizing the finances of about 15,000 Greeks who sent around $5 billion abroad in the last three years.

For NPR News I'm Joanna Kakissis in Athens.

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