ATHENS, Greece — The head of Greece's judicial task force for fighting tax evasion on Monday ordered criminal charges to be brought against a top Finance Ministry tax official for allegedly failing to pursue potential fuel smugglers.
Prosecutor Grigoris Peponis issued the order just days after a public spat with the governing coalition in which he briefly resigned, accusing the government of trying to sideline him. He returned to his duties two days later.
The startling development comes as Prime Minister Lucas Papademos is seeking to accelerate reforms ahead of a new inspection by international debt monitors, on whose verdict debt-crippled Greece's vital rescue loan program hinges.
A Finance Ministry statement said Ioannis Kapeleris, the ministry's secretary general for tax and customs affairs, was asked to resign after Peponis ordered his prosecution for alleged breach of duty — a felony charge that can carry a maximum life sentence.
A lower-ranking Athens prosecutor was tasked with formally pressing charges following receipt of the file against Kapeleris, following a two-month investigation into claims that he hindered efforts to penalize petrol station owners for alleged fuel smuggling. Kapeleris has denied any wrongdoing.
Papademos' interim government is struggling with lagging revenues, largely due to rampant tax evasion — estimates value the black economy at about a quarter of Gross Domestic Product — compounded by a deeply inefficient tax collection system.
Greece has been surviving on international rescue loans since May 2010, after years of government overspending built up an unsustainable national debt that brought it to the verge of bankruptcy.
In exchange for the first €110 billion ($142 billion) bailout — and a planned second one worth a further €130 billion ($168 billion) — the country was subjected to deeply resented austerity measures that mixed deep cuts in pensions and salaries with increases in taxes and retirement ages.
The cutbacks, combined with planned sector sackings and market reforms, sparked public anger with unions holding a string of strikes and protest marches over the past two years.
Inspectors from the European Union, the European Central Bank and the International Monetary Fund, known as the troika, are due in Athens in two weeks to discuss the pace of reforms. Greece needs its next loan installment to repay a €14.4 billion bond that expires in late March, and finance a €100 billion ($129 billion) writedown of its privately-held debt currently under negotiation.
"We face very hard negotiations with the troika to receive the loan," government spokesman Pantelis Kapsis told private Skai Radio Monday.
The first strike for 2012 came on Monday, with pharmacists across the country starting a 48-hour walkout to protest government plans to trim their profits by cutting the retail drug prices. They also demanded payment of hundreds of thousands of euros owed by social insurance funds.
State hospital doctors also started a four-day strike, objecting to government reforms to the state health system. The doctors were to be present at work but would be treating only emergency cases.