The Null Device

The 324 swimming pools of Athens

Greece's economic crisis has highlighted the fact that the Greek taxation system leaks like a sieve, with tax evasion being almost a point of honour. Now, under pressure from the northern European economies paying to bail them out, the Greek tax authorities are uncovering the depth of the problem:

In the wealthy, northern suburbs of this city, where summer temperatures often hit the high 90s, just 324 residents checked the box on their tax returns admitting that they owned pools. So tax investigators studied satellite photos of the area — a sprawling collection of expensive villas tucked behind tall gates — and came back with a decidedly different number: 16,974 pools.

Various studies have concluded that Greece’s shadow economy represented 20 to 30 percent of its gross domestic product. Friedrich Schneider, the chairman of the economics department at Johannes Kepler University of Linz, studies Europe’s shadow economies; he said that Greece’s was at 25 percent last year and estimated that it would rise to 25.2 percent in 2010. For comparison, the United States’ was put at 7.8 percent.

The Greek government has introduced laws stepping up tax enforcement and eliminating loopholes; whether they're strong enough to survive the entrenched culture of bribery in Greece remains to be seen.

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