Wired Tourists, Students, Housewives To Be Tax Spies

There were three notable items in the follow up, 11-page letter sent by Yanis Varoufakis earlier today to the Eurogroup, and its president “Jeroen.”

But first, by way of background, here is what happened as recapped by Reuters.

Earlier today Greece sent an augmented list of proposed reforms on Friday  (see the 11 page letter attached below) but EU officials said several more steps were required before any release of aid funds.  In the Yanis Varoufakis outlined plans to fight tax evasion, activate a “fiscal council” to generate budget savings and update licensing of gaming and lotteries to boost state revenues. All noble ideas, and all set to crash and burn since it has all been tried and failed  in the country in which paying taxes is considered theft (by the government).

However, the expanded list of reforms arrived too late for deputy finance ministers and European Commission experts who met on Thursday to scrutinise it before a regular meeting of finance ministers of the currency area next Monday. “Whatever proposals emerge (from Varoufakis), they can’t be seen in isolation,” said a senior EU official, who declined to be named due to the sensitive nature of the talks. “They have to been seen in the overall context of all policy measures … There is no connection with the disbursements.”

One key condition for Greece to receive any more euro zone money is for Athens to reach an agreement with its three international creditors – the euro zone, the ECB and the IMF – on the implementation of reforms agreed by the previous government. Such talks have not even begun yet.

This is a problem because as we reported hours ago, following its €310 payment to the IMF, Greece now literally has no money left, and absent some last ditch generosity from the Troika (pardon the Institutions, more on the latest Greek fetish of renaming things shortly), the next €350MM payment to the IMF due on March 13 will simply not be made (let alone the €580MM payment on March 16 and the €350MM payment on March 20).

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Which brings us to the topic of this post – the Varoufakis letter (pdf courtesy of the FT).

First, we were delighted to see that as we cautioned in About The Authorship Of The Infamous “Greek Reforms” Memo, when we said that “for anyone who is involved in the creation, drafting, and production of mission-critical documents, whose metadata can have huge downstream consequences, the best solution is to simply read the brief manual on Redaction of Confidential Information in Electronic Documents which nobody ever does at least not before they hint save, print or send.” Varoufakis appears to have done just that, and after the fiasco involving the authorship of the the first “Greek” letter to the Eurogroup, all the associated PDF metadata has been thoroughly scrubbed. Good job.

Second, among the various section headings, including:

• 1st Reform: FISCAL COUNCIL: Activating the Fiscal Council, achieving economices, and expanding its remit
• 2nd Reform: BUDGET PREPARATION & ORGANIC BUDGET LAW
• 3rd Reform: ‘ONLOOKERS’ VAT EVASION-FIGHTING SCHEME: Large numbers of causal (sic) “onlookers” to assist in the fight against VAT evasion
• 4th Reform: TAX ARREAS: Improving existing legislation
• 5th Reform: Immediate Public Revenue accrual through Online Gaming Services
• 6th Reform – ANTI-BUREAUCRACY, SELF-INFORMING PUBLIC SECTOR SCHEME
• 7th Reform – Provisions for the adoption of immediate measures to face the humanitarian crisis

There were a few notable findings, among which the estimation, cited by Varoufakis, that of the €76 billion in total tax arrears, only €8.9 billion are collectable; that Greece is considering tapping online/e-gambling as a “significant untapped public revenue opportunity) which could provide public revenue well “in excess of €500 million per annum”… however Greece admits it will require technical assistance “for monitoring internet-based gambling”, and so on, the most interest proposal was the following.

Meet wired tourist part-time tax inspectors!

And here comes the Greek tax collecting police state, in which “large numbers of non-professional inspectors are hired to pose on behalf of the tax authorities, while ‘wired’ for sound and video… We envisage that the recruits will come from all walks of life (e.g. students, housekeepers, even tourist in popular areas ripse with tax evasion) who will be paid hourly and who will be hard to detect by offending tax dodgers.”

And yes, while one can joke all day about wired tourists collecting hourly pay from the Greek government while moonlighting on behalf of the Greek tax collector agency (a process that will actually end up costing far more than collecting especially since the collectors have no incentive to actually catch anyone but to merely be paid as long as possible on an “hourly” basis), the real issue here is that Greece is effectively hoping to become  a tax-collecting Police state: in which “the news that thousands of casual “onlookers” are everywhere, bearing audio and video recording equipment on behalf of the tax authorities, has the capacity to shift attitudes very quickly, spreading a sense of justice across society and engendering a new tax compliance culture – especially if combined with the appropriate communication of the simple message that the time has come for everyone to share the burden of public services and goods.”

Actually, the only attitude it will shift is one toward civil war, as millions of Greeks, long used to generations of free-riding, are suddenly forced by the Greek Tax-collector police state to change their behavior, to which they will respond appropriately.

Ain’t gonna happen, especially when one considers what happens to the tax-collector hopefuls once of them is captured and beaten to an inch of his life or just an inch further.

In fact, it would be more realistic if Greece asked to outsource all public and private communication to the NSA and then subcontract it to find who the tax evaders are. Especially since the NSA already knows all the perpetrators.

Of course, should this plan pass, the Varoufakis government has at most a few days before it is swept from power, most likely violently.

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Which brings us to the third point, and the one which ties everything together. Because while Greece knows all too well that none of the proposed reforms are feasible, what it can do is ask for more money.

And it has, as can be seen below, only as Varoufakis calls it, don’t call it a third bailout and instead use “Contract for Recovery and Growth of the Greek economy.”

Which nicely rounds out everything the new government has achieved. Well, speaking loosely, because so far, all the Tsipras government has achieved is merely continue the much hated austerity policies enacted by Samaras and his predecessors, but it has managed to change a few terms around:

• instead of “Troika” it is now “Institutions”
• instead of “Liquidity” it is now “Cash Flow”
• and instead of “Third Bailout” it is now “Contract for Recovery and Growth of the Greek economy.”

As for the conditions that the Troika, oops, Institutions, will impose in order to grant Greece the “Contract for Recovery and Growth of the Greek economy”, well… hopefully you don’t really need that left kidney.

If the Greek people are naive enough to fall for this, and believe this is how the radical-left government plans on “implementing” its campaign promises, then more power to them, if not to their pensions: those are about to be paid to the IMF so the IMF can then proceed to fund the US puppet regime in Kiev.

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Full Vaourfakis letter below.

Reprinted with permission from Zero Hedge.