Greece, Switzerland Near Deal on Tax Evasion Treaty

After long negotiations, Greece and Switzerland are reportedly set to sign an agreement that would give the ailing Greek government access to information about accounts held in Swiss banks by Greek citizens.

The document was detailed in the the German magazine Der Spiegel in an article outlining Greece’s attempt to find out where rich Greeks and tax evaders are hiding their money. Not one of the 300 Members of Parliament listed a foreign bank account, although former Finance Minister Evangelos Venizelos, now the PASOK Socialist leader, said he had discovered many wealthy Greeks were trying to evade taxes with secret foreign accounts.

With a coalition government led by Prime Minister Antonis Samaras – and including PASOK and the Democratic Left – about to make another $14.16 billion in cuts demanded by international lenders to keep rescue loans coming, Greece is anxious to find revenues wherever it can. Tax cheats have cost the country nearly $70 billion and Greeks who are furious over pay cuts, tax hikes and slashed pensions have complained the rich aren’t paying.

Critics said that even if the treaty is signed, Greece would not benefit as much as expected because the exact amount of untaxed money held in private Swiss accounts is unknown. The Bank of Greece estimates the worth of the private Swiss accounts belonging to Greek tax evaders at $87.8 billion, but Greek media has reported it could be as much as $250 million, more than half the country’s debt.

Swiss government sources estimate it is only about $25 billion, however. It is not against Greek law to have foreign bank accounts as long as they are reported and the treaty could reveal who is hiding their income and assets outside the country. Greece is looking to glean more monies by taxing those previously-unknown accounts at 20-30 percent.