Greeks Mount Civil Disobedience, Scorn Taxes

Raising taxes has been one of the major proposed elixir of “growth” by mainstream analysts for resolving the crisis in the Eurozone. More inflationism and more deficit spending as the other nostrums.

Unfortunately, economic reality and intentions by politicians and their institutional backers don’t seem to square. Greeks have mounted a civil disobedience campaign against paying taxes.

Here is the Financial Times (Alphaville) Blog,

The desperate cunning scheme to get Greeks to pay property taxes by bundling them with electricity bills didn’t last long. You guessed it, people stopped paying their electricity bills and now it looks like the power company – which had to be bailed out last month – has stopped even trying to collect the levy.

From Ekathimerini, the Greek daily (emphasis ours):

“Public Power Corporation (PPC) has already disengaged itself from involvement in the payment of the special property tax that had been incorporated into electricity bills.

“Well-informed sources suggest that the new bills the company is issuing do not include the property levy despite the law providing for the first installment concerning 2012.

The decision, the same sources say, appears to have the acquiescence of the Finance Ministry.

“Judging by the fact that unpaid bills in the first quarter of the year totaled some 1 billion euros, PPC believes it has become clear that households cannot afford to pay electricity bills that are burdened further by the extraordinary property tax in the current recession conditions.

The government had hoped to raise €1.7bn-€2bn from the levy in the fourth quarter of last year. But a massive unions-led civil disobedience movement against this “injustice” scuppered that and a ruling that it was illegal to disconnect people’s electricity supply for non-payment sent the collection rate even lower.

However, the memorandum of understanding with the IMF-EU signed in March demands that Athens collects a range of back taxes, such as the property tax from 2009 which was essentially never collected. So it will be interesting to see how the Troika reacts to these most recent developments.

Again, more signs of the ongoing self-liquidation process of Europe’s embrace of the Santa Claus principle.

Updated to add:

Greece banks reported a surge in deposit withdrawals last Monday, and capital flight or "buy orders received by Greek banks for German bunds" to the tune of € EUR800 million.

Also, tax revolts have also become apparent in Italy.

A recent report from the Telegraph.co.uk (hat tip: Cato's Dan Mitchell)

In the last six months there has been a wave of countrywide attacks on offices of Equitalia, the agency which handles tax collection, with the most recent on

Saturday night when a branch was hit with two petrol bombs.

Staff have also expressed fears over their personal safety with increasing numbers calling in sick and with one unidentified employee telling Italian TV: “I have told my son not to say where I work or tell anyone what I do for a living.”

In another incident last week Roberto Adinolfi a director with arms firm Finmeccanica was wounded by anarchists in Genoa. The group later said in a letter claiming responsibility that they would carry out further attacks.

Annamaria Cancellieri, the interior minister, said she was considering calling in the army in a bid to quell the rising social tensions.

“There have been several attacks on the offices of Equitalia in recent weeks. I want to remind people that attacking Equitalia is the equivalent of attacking the State,” she said in an interview with La Repubblica newspaper.