The Default Line: THE INSIDE STORY OF PEOPLE, BANKS AND ENTIRE NATIONS ON THE EDGE Read Online Free

ministers, she says, warned her off investigating the tax affairs of the Greek elite.
    This is what a country near default looks and sounds like. There’s not just a collapsing economy, there’s also a failing tax system, and the social contract between Greece’s people and its rulers is broken. Greece has been hit harder than its fellow ‘programme nations’, as the European Union calls them – or PIGs (Portugal, Ireland and Greece), as the markets refer to them. From Greece to Germany, government ministers are now liken-ing the euro crisis to a war – and it’s not uncommon to hear Winston Churchill quoted during debates about the deficit. The euro crisis is now much more than just a financial crisis. In Athens at the end of 2011 it was reaching a second phase: a remarkable, historic experiment in sovereignty.
    A group of uniformed police officers staging a protest is a rare and scarcely believable sight. It was particularly strange to see such a group outside the German embassy in Athens, chanting, ‘You’re shooting us, you’re bleeding us, you’re pushing us off the cliff.’ It was a measure of how little the Greeks were prepared to thank Berlin for the borrowed euros. The protesting officers waved a banner declaiming, ‘Kick out the Troikans.’
    That September, what might well be called a Troikan Horse arrived – on 5 million electricity bills. I met 40-year-old Kostas Antonopoulos at the tax collectors’ union meeting. He later rang to invite me to his flat, expensively acquired during Greece’s euro-fuelled credit boom. He shares the flat with his wife, who is six months pregnant, and his young son. The couple fear for their children’s future after watching documentaries about the impact of IMF programmes in Argentina. ‘Meet our new tax inspector,’ says Kostas, pointing to the electricity meter in his basement. His wages have halved to €900 per month, below the €1000 mortgage payment on the flat he bought during the go-go years. He can scrape the payment together this month, by raiding his savings. But he doubts he’ll be able to find the money next month. Even if he did, the electricity meter might prove to be more effective at collecting taxes than he and his colleagues.
    The new property tax meant a charge of hundreds of euros for every Greek household, including pensioners and even the recently unemployed. The tax was only invented the month before to meet a €2 billion shortfall in Greece’s austerity plan. Originally it was meant to be a small, temporary charge but, as the saying goes, there is nothing more permanent than a temporary tax. So it was to prove: the property tax has doubled and is here to stay until at least the end of 2014. Greeks renamed it haratsi , the Turkish word used to describe the centuries-old Ottoman poll tax. Non-payers were to have their electricity cut off. This was ‘shock therapy’ indeed.

‘Wow, we’re going to save Greece!’
    The shock therapists were the IMF and the EU. Tax rises, spending cuts and so-called structural economic reforms were Greece’s side of the bargain for the European and IMF bailout. In Washington the prospect of the IMF grappling with Greece was rather appealing. ‘Initially the Greek crisis was received with great excitement,’ a senior IMF official told me. ‘An advanced country… Wow, we’re going to save Greece!’ The IMF was far more experienced at dealing with low- and middle-income countries after banking busts. However, it had also learnt that its standard-issue medicine had to be dispensed carefully. The sequencing of policy mattered, as did the timing.
    The IMF had been brought in at the insistence of Germany. ‘The IMF was the only institution which has the experience with adaptation programmes,’ said a senior official in Berlin. ‘European institutions have never done it, we were sure that they would be too weak to tell a member country what to do.’ It was an early expression of the divide between