BRUSSELS — Greece is losing out on about €60 billion ($81 billion) in uncollected taxes, with half of that caught up in lengthy legal taxes that prevent the debt-ridden country from getting its hands on desperately needed funding, a European Union task force said Thursday.
The task force was set up earlier this year when it became obvious that Greece needed a lot of support to implement reforms promised in return for a massive international bailout and get its economy growing again.
The group's first report, presented by task force head Horst Reichenbach, paints a dire picture of Greece's efforts to raise money to repay its debts.
In addition to the outstanding taxes, the report also says that Athens won't be able to privatize public assets worth €5 billion by the end of the year because the unexpectedly sharp economic downturn has made investors cautious about sending money to Greece. The €50 billion multiyear privatization plan is key to the country's two bailout programs.
The report, which the EU said showed "cautious optimism" for Greece despite some of its negative findings, comes amid a further intensification of the eurozone's wider debt crisis, which was kicked of by Greece's troubles two years ago.
Investors on Thursday continued to dump bonds from much larger countries in the eurozone, including Italy, Spain and France — underlining that the debt turmoil risks spinning out of control, threatening the future of the common currency.
The yield, or interest rate, on Italy's 10-year bonds, was once again above 7 percent, the rate that forced Greece, Ireland and Portugal to request international rescues. The spread — or difference in interest rates — between the 10-year bonds of France and Germany was almost 2 percentage points, a euro-era record.
The fact that the currency union's number two economy pays more than double for borrowing money than the number one economy shows how the eurozone is quickly running out of options when it comes to helping its weaker members.
Analysts say that the eurozone's slow and often fumbling efforts at resolving Greece's troubles is one of the main reasons investors have lost confidence in the entire currency union.
The EU task force is one of the latest attempts at giving some hands-on support for the country, which remains stuck in a deep recession.
The group's report said that of the €60 billion in outstanding taxes, as much as €8 billion would be immediately collectible and could help Athens cut its massive budget deficit.
However, about €30 billion of the outstanding taxes are caught up in lengthy legal disputes that can take seven to 12 years to resolve.
Strengthening the tax dispute resolution mechanism will be one of the priorities for the task force, which will deploy experts from other EU member states, the EU and the IMF to help Greece get its economy growing again.
The experts will also seek to support Greece's privatization program, after the government had to cuts its sell-off target amid the worsening economic troubles. Athens now aims to raise €1.3 billion by selling off publicly owned companies and real estate between October and the end of the year, the report said. It did not give a figure for how much was privatized before October.
- What the Senate’s tax break extensions...
- Officials suggest possibility of reforming...
- Police outside cop funeral turn backs on NYC...
- New Russian military doctrine says NATO top...
- Bad Santa? 5 tips to tackle your holiday gift...
- Heroes 2014: Ex-CIA officer uses...
- Biden: NY officers' deaths touched soul of...
- School bans 'I Can't Breathe' T-shirts at...
- Obama 's Christmas in Hawaii: Carols,... 16
- On Christmas, Obama marks end of Afghan... 12
- Officer kills armed 18-year-old near... 11
- Senate, CIA agree torture program was... 6
- Sony announces limited release for 'The... 5
- What the Senate’s tax break... 4
- Jeb Bush to step down from Tenet... 3
- N. Korea compares Obama to monkey in... 3