The Guest Blog

By Vassilis Lazaris

“Poverty gives birth to crafts”. This is an old Greek proverb, which says that the lack of wealth is at the same time the source to create it. What happens though, if “poverty” leads States to “find” wealth, by raising taxes or cutting salaries and pensions in a manner that is – to say the least – unconventional? This is the practice observed in some cases, in Europe’s south, during this time of crisis.

The European Union is a society of different peoples, who share common beliefs and aspirations. The founding rock of the EU lies in the fact that Europe’s States are governed by the rule-of-law. That means that they are States formed by their people, governed by them for their own benefit, through the adoption and application of rules known to and accepted by all citizens.

Franco Frattini, then European Commissioner responsible for Justice, Freedom and Security, started his speech in Vienna in 2007 saying: “We must maintain and develop the European Union as an area of Freedom, Security and Justice. This is a central concern for EU citizens.”

The crisis in Greece

Greece is not a poor State. However, government practices and mismanagement of its finances during the last forty years, took a heavy toll on the Greek people, as the recent crisis soared. Greece’s need to raise money to fulfill its obligations to foreign lenders, lead to the rise of taxes for private citizens and businesses and the cut of salaries and pensions. These in turn resulted in a spiral of recession and rise of unemployment, which found both the Greek Government and people totally unprepared to face them.

The Government resorted to “unusual” practices in order to raise money and deal with the crisis.

“Unusual “ practices – Two examples

We present, here below, two examples of such “unusual” practices, which strike at the foundation of the EU: the rule-of-law.

The first one concerns the general public. The Government decided to raise the price of heating fuel, in order to fight fuel smuggling. In essence, the consumers were “punished” during a time of financial crisis, to pay higher prices for heating, due to the inability of the State to persecute and prosecute smugglers. Why does this strike at the notion of the rule-of-law? Simply because it is a measure that hits the general public, which, however, expects its State to be able to fight effectively criminal behaviors and practices. The State does not understand a simple thing: the smuggler will find another “product” to promote and sell, still in an unlawful manner. And the “product” may be something, that a society governed by the rule-of-law may find to be more sensitive and more important (humans, drugs etc.).

The second example refers to a specific group of workers, who were asked by the Greek State to be re-taxed for an insurance benefit received and taxed again in the not-so-recent past. The group consists of former employees of the Organizing Committee for the Olympic Games of Athens – ATHOC 2004.

In 2004, after the successful conclusion of the Olympic Games, each of 1,653 employees received an amount of money, which was given to them as a means to deal with the effects of unemployment. In order to create the fund, ATHOC 2004 established, a few years earlier, a life insurance group policy and paid the premiums. All relevant taxes were paid to the State, care of the insurance company, according to existing legislation. The insurance company provided each ATHOC 2004 employee with a certificate for tax purposes, stating that their tax liability was exhausted.

Six years later (!) the Greek State informed the former ATHOC 2004 employees that they should submit supplementary income tax return declarations, as the insurance benefit was now considered as employment income (additional 40% tax on the amount of the benefit). This “transformation” was made possible in a manner which could not be challenged at the Courts. The Legal Council of the Hellenic State issued an opinion, which was subsequently accepted by the Ministry of Finance by means of a Ministerial Decree. Both these instruments cannot be judged by the Courts. In addition, the Greek State passed a law (4022/2011), which stipulated that taxpayers, who were asked to submit supplementary tax return forms for obligations prior to 2010, would be subjected to surcharges if they filed their tax returns with reservations. The aim of this provision in the law was to make sure that taxpayers would not have recourse to the Greek Justice system.

To make things worse for the former ATHOC 2004 employees, their treatment by the Tax Services can be characterized as “chaotic”, due to the fact that Tax Service employees interpreted the law (!) and the guidelines issued by the Ministry of Finance at their will!

The question in this story is: how was the rule-of-law respected in this case?

These two examples show in a striking way, how a State can turn against the people, whom it is deemed to serve and protect, no matter whether it considers that its actions are taken for the general benefit of its citizens. Laws exist for a reason. To help people deal with everyday issues, provide assurances for the future and assure citizens that their rights will be served and protected. That is the rule-of-law. That is the foundation of our Union. We – in turn – need to protect it in every possible way we can. And we will.

Vassilis Lazaris is a professional economist, holding an MBA from Warwick Business School and a Bachelor’s degree from Athens Economic University. Vassilis has more than 20 years working experience, both as an entrepreneur and as a business manager for large multinational and Greek companies.

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  1. This is indeed so true!!! The “unusual” and unfair practices the Greek government has been “inventing” and implementing break down every law and lead us to believe that there is no rule of law whatsoever. The Athens 2004 employees have been targeted so unfairly also because it’s been more than 8 years since the end of the Olympic Games and people have gone their own ways, they are not in a position to fight together anymore, so they are the easy target in a way. It’s imperative that issues like the ones mentioned above should be resolved in a fair manner, otherwise, noone knows whose turn will be next.

  2. good question,
    – can a state in the name of the public benefit not respect-or disrespect-set aside the rule-of-law?
    can “in the name of crisis” be the reason for radical measures or a hidden excuse for lack of serious planning?
    call me a dreamer but i strongly believe that we the citizens must fight for our right.

  3. This article written by a fellow employee during the ATHENS 2004 OLYMPIC GAMES, shows exactly our major problem, nine years after the successful completion of the Games.
    The facts stated are absolutely true.

  4. Completely agree with the article. Being one of those who worked hard for the games, like all of us, I feel “mistreated”.

    I believe justice will be awarded at the end.

  5. Constitutions and civil laws of many countries explicitly forbid retroactive implementation of the law (ex post facto). Laws in Greece are often crafted to suit immediate needs of the executive powers while citizens seldom exercise their right to challenge such laws.

    However that is not the only Greek specifics. It is rather rule than exception that members of the Government remain MPs. One wonders how executive and legislative powers are not separated.

  6. During our employment with the ATHENS 2004 OLYMPIC GAMES ORGANIZING COMMITTEE we were informed that we had been insured (under a group insurance scheme) with a multinational life insurance company. At the end of our term (mine was from 2000 to the end of 2004) we were issued with an attestation for the amount that was returned back to us as a “dividend” from our monthly payments to the insurance company. This statement also confirmed that according to Greek law 15% tax had been deducted.
    I must admit that we were taken by surprise when informed seven years later that despite the fact that all the above had taken place, the Ministry of Finance had obtained from the legal services of the state a statement cancelling the 15% taxation and changing our “dividend” status to “income” with a taxation of around 40%. Result: seven years later we were asked by the tax office to pay the difference! In my case it was close to € 17,000 (seventeen thousand Euros).
    On the other hand we were informed the four executive directors were exempted. That left a very bitter feeling.
    Our question is: How, after seven years and a statement issued according to a specific law we were asked to pay again and especially such a big amount. Some of us are already retired (including me) and having to pay such amount makes our life extremely difficult.
    I only hope that somebody out there can see and understand the injustice and do something about it.

  7. So next time you read about Greeks who avoid paying taxes just consider why we feel that the tax system is unjust and high-handed to the poor and the middle class.
    Please note that the fat cats, members of the board, have been exempted from the tax that the rest of us have to pay, regardless if we are now unemployed.

  8. I belong to the group of ATHOC 2004 workers. What has really made me furious besides the unfair characteristics of such practices, is that not only I am retaxed 8 years later but they have charged me with additional 1% for each month since the decision about ths taxation was taken until the day my tax office called me (that was 11 months later). I told them I did not received any letter/notice to contact my tax office and the answer was that there is no way I can prove it and not to waste my time on this. out of all these an additional amount has to be paid as a surcharge due to my delay as if I even knew or received any official invitation by my tax office. Now I am still struggling to get an official information as to how many installments I am entitled to ask for the amount to be paid in full. Needless to say that noone of us has the luxury to pay at once this new, sudden an totally unfair taxation.

  9. I totally agree with V.Lazaris’ article! All facts mentioned in his article, are true!
    We have been targeted unfairly!!!
    I have great faith in justice and I hope that everything will be settled the soonest possible!

  10. Greece is trapped in a minefield of taxes… ? law stipulates for the future, not retroactive, and maintains power if another rule of law does not explicitly or implicitly repeal

  11. Greece, a democratic State?
    Today, the economic crisis in Greece involves everybody exvept the civil servants. As always, they try, through their friends (the Politicians) to survive bringing on the table Laws and Regulations against The LAW. Such case is the case of the former works at ATHENS 2004 S.A. company, responsible for the execution of the Olympic Games in Athens in 2004.
    Some clerk from the Authority of Nomiko Simvoulio ton Kraton (Advisory Board for the State on legal Matters), a wholly state owned committee, decided against the La, in order to increase the budget of the State by taking back some of the money the workers took as bonus through a life insurance contract with ALICO, a well known insurance company, for the purpose to save his salary because he is a civil servant while the others were belonging in the free sector of the economy.
    The truth is that today, the Greek economy cannot support the over 1 million civil servants, while they do outrageous things in order to protect their well paid positions. In Greece , a democratic state, a public servant cannot be fired from his job, no matter what…
    The way they get into the governmental posts is totally not civilized, with the doctrine “who you know”. Besides the case of the A2004 formal personnel many of whom today are between poverty and starvation, the civil servants in Greece, acting democratically with the clubs of politicians because they are their army, are constantly bringing Laws to get every euro the free entrepreneurs and the people involved in the free sector of the economy have.
    During World War II and the German occupation thousands of the Greek population in the cities where dying because of the starvation. During the most productive period of the economy during the German occupation, the Greeks were dying of starvation because all food an resources were going to the German Army..
    Today, it is the same. The occupation army is the civil servants and the occupant force the politicians. The Greek economy cannot support them any more.
    Takis Metaxatos

  12. Although it’s been said that the credit belongs to the man who is actually in the arena, who was dedicated and devoted and he who did spent himself in a worthy cause, as we did 8 years ago at A2004 Olympics – for our country – I remember working 16 hours a day for a long period in those 5 ½ years being proud for the praise our country received despite the false promises given to us. Now our government becomes the critic pointing out how the strong man can stumble. It is amazing how such a small nation with such a great history subverts it and always goes against its people. I totally and honestly agree with my ex-colleagues’ article Vassilis Lazaris and with all the comments followed by ex-colleagues re the issue of A2004.

  13. Let me also agree with my ex-colleagues above. Such an unfair treatment is what is leading all of uss take any kind of measure to protect ourselves.
    Being an employee of the 2004 ATHENS OLYMPIC GAMES ORGANIZING COMMITTEE for a period of more than six (6) years, I received a compensation at the (because that is what it was) being said and reassured that extra taxation should not be paid. If we were told otherwise noone of these 1650 persons would have any objection. Now, we are asked to pay enormous amounts of money, actually being mislead and deceived. Most of us are unemployed or badly paid. Someone should care and make sure that everyone is treated equally at least as far as taxation is concerned.

  14. Everything is explained clearly and to the point above and the key words are MISLEAD and DECEIVED but I will add unfairly treated since a certain elite was taxed only 20% while we were taxed by 40%. We are all proud to be part of such huge and important event especially for a country like ours and our salaries and compensation were NOT what sent Greece to bankrupcy but it was corruption and bribes related to infrastructure and the venues.

  15. As an employee of the Athens 2004 Organizing Committee for a period of almost 4 years, I totally agree with the article and facts stated by my colleague Mr. Lazaris.
    We have all worked extremely hard to make the Games a success and the demand to return 40% of our bonus, eight years after the completion of the Games, seems unfair and unbearable.
    I hope and trust that this case will be settled.

  16. Not only the legacy of the Athens 2004 Olympic Games has been wasted after the end of the games, but also the people who worked for what has been worldwide acknowledged as the best time of the contemporary Greece are now punished!

    “Leaders” who have been covering and protecting selective tax evasion for years, are now targeting a large group of middle level executive employees, who have resigned from their previous jobs in order to commit themselves to the success of the games. The questioned life insurance policy was part of the agreement included in the contracts we signed with the Organising Committee. At the end of our professional engagement with ATHENS 2004, we declared at the Tax Authorities the compensation we received according to the directions we were given by the organisation’s administration.

    Seven years later, we are asked to return approximately 40% of this amount, not as a “voluntarily” financial contribution for the salvation of the country, but under the threat and insult of tax evasion. Whether this amount is still available or whether it has been consumed in the seven years that passed until we found a new employment position is not something that deserves consideration in the minds of our “leaders”. This happens in “Hellas” of the 21st century, a country which claims to be the “cradle of Democracy”.

    May God help us all!

  17. All employees of ?2004 experiencing a really difficult and hard condition. Unfortunately, such decisions push the Greek people to be skeptical toward to their state

    However I am proud I was there and i hope for a ”breath of fresh air”

  18. All this is at least unethical for all the people that worked very hard for the Games. After the Games all the representatives of the State were marching in media tryimg to get part of the Glory of Games success. Now that media left they want to tax again the people that achieved this success. 7 years later…that is State’s appreciation for our efforts. And also consider that many of the 1653 persons are unemployed for a long time now. This article is 100% true and describes the feeling of bitterness and betrayal we all have now. Let’s hope that EU has better sense of justice than the Greek State and a solution will come for this mess.

  19. I feel that I have to be punished for some reason. Government acts with racism. Gives penalty to now unemployed former workers 40% although the state being paid already with the proper taxes, and gives the benefit of 20% only to directors, means to those who were being paid with a lots of thounsands. All l this with the unreasonable tactic that all of us who gave 5 or 6 years of our lives to make the Games successfull are disliked from the Greek citizens. Why politicians try to separate people? Did they care about them before? Did they ask them before of their opinion about anything ? WE ARE ALL GREEK CITIZENS AND LIVE IN UNJUSTICE. There is no any law or legal practice which supports the verb DISLIKE. It is only another way being robbed once more! We all now rely to EU to give solution to our living problem since most of us are unemployed for long time and have no income for paying thousands of euros..

  20. There is a Petitions Committee in the European Parliament, where citizens can apply to indicate/denounce acts or practices that violate the EU law or the transposition of EU law into national legislation. Many times citizens do apply because of their controversies with their State, and in those cases the Petitions Committee advises them to address their issue to their National Ombudsman, when this is not an issue that violates the EU law.
    Some of us, former ATHOC employees, did apply to the Greek Ombudsman (so-called ????????? ??? ?????? – “Synigoros tou Politi”) and the answer was as follows:
    “If one owes taxes to the State, and the State does not claim the money back, the debt is written off (????????????) after 5 years. Yet, the lapse period (???????? ??????????) extends to 10 years when the person has not declared income [this is not our case, because we declared the money received] or if the declaration proves inaccurate.” [this is supposed to be our case, but our declaration was accurate: we were given the instruction to declare the bonus as indemnification (??????????) and not as income (????????), and we provided at the time our Tax Authorities (???) with the relevant document by the insurance company, stating that we had payed our premiums and that this was an indemnification.]
    So, I cannot see where we failed the State.
    On the contrary, since we seem to have been, in a way, manipulated to inaccuracy, I wonder if the guilt is with us or with those who guided us wrongly. The citizen should be protected from misguidance. It seems we were misinformed about our taxation, due to lack of information. If we were informed that this was income and that we should be taxed, I am sure we would accept it and conform with the law. We were never informed correctly.
    And, since the State found out this ‘inaccuracy’ after 7 years, cannot this be considered a considerable delay on the part of the State, which forces us to pay larger penalties? If the State had found out the ‘inaccuracy’ earlier, we would pay lesser penalties. A citizen may think that the State deliberately delayed in order to cash more penalties…
    Can the lack of information and, perhaps, the State’s delay, be connected with the EU law, so that we send a petition to the aforementioned Committee of the European Parliament, and ask for their help?

  21. I worked for the Athens 2004 Olympic Games for two years.
    I agree with all the comments my colleagues are saying above and this article.
    Not only is this situation unfair but it is also so very disappointing.
    All the employees worked so hard day in day out for these games.
    No salary could cover the exhausting hours and stress we had to go through.
    Now after all these years when all our salaries have been reduced to almost minimum wage because the companies we work for now our having huge issues because of the crisis or even worse now when ex -ATHOC employees are jobless because they have lost their jobs again because of the crisis the government is asking us to pay this money when we have already used it 8 years ago when we were jobless back then after the Olympics!
    This is outrageous, unfair and a very cruel way to pay back all these Greek people who worked for these games with such love and devotion for the spirit of the Olympic Games and their country.

  22. No surprise. The greek political system that is responsible for corruption, for tax evasion, and has driven our national economy to disaster, is also unfair to the people who have worked so hard for the Olympic Games in 2004. Remember…our country was about to give up the organisation of the Games, when this group of people took over in 2001. It was already very late…We gave our best and the results are worldwide known. Greeks around the Globe felt proud and happy and the international community has seen that Greeks can do miracles… Instead of honoring the staff and the volunteers of Athens 2004, Greek politicians are hiding from their own responsibilities. Well, we’re not done yet…

  23. Could not agree more with the article and all comments written above! Great and true facts Mr Lazaridis! It is about time this great injustice goes public!

  24. Completely agree with the article.
    I am one of those who worked for the games and we worked really hard.
    We are unfairly targeted and we sincerely hope that EU will have a better sense of justice than the Greek State

  25. Completely agree with the article. Totally unfair tax practices against people who have worked so hard for the success of the Olympic Games!!!

  26. II totally agree with the article. All employees of the Athens 2004 Organizing Committee, worked with a unique professionalism. All driven by a strong PATHOS delivered the Games in a way that made ALL Greeks proud. Today, nine years later, with this unfair treatment it seems that this great effort has not been respected. We expect that common sense will finally prevail.

  27. It is obvious that the clause in our contracts that this “bonus” was tax free has no legal value for every one – but only for few select.(This is also a way to divide and rule.) It is obvious that politicians avoid taking action because of the political cost to handle a complicated issue at difficult times. The Athens 2004 employees are becoming the scape goat for sins others have committed. There is no hope – and there will be no justice.

  28. “It is unheard of to “grandfather” a tax like that in a new law “ said yesterday my friend in Boston when we discussed the issue.
    I will state the obvious: It is an unjust decision affecting many people and needs to be corrected. Lets hope that the Greek State will not remain indifferent.

  29. Thanks for posting this article! “Unusual “ practices is really a euphemism for unlawful practices targeting a specific group of employees. Let’s hope that someone will finally take notice and act!

  30. Something very important to be taken under consideration in addition to the facts mentioned in previous comments:
    The “Organizing Committee for the Olympic Games – Athens 2004 S.A.” (ATHOC), a societe anonyme whose shares were exclusively owned by the Greek State, undertook to pay its employees the amounts of the Alico insurance contract “free of tax”, i.e. after deducting any tax applicable (according to Greek tax law, the applicable tax in such cases is withheld by the payer and deposited with the competent tax authority and the balance, free of tax, is paid to the payee). This provision had been included explicitly in several contracts with ATHOC staff and was actually applied to everybody who received the Alico compensation, regardless of whether or not the relevant provision had been included in their contracts, for obvious reasons of equal treatment.
    In other words, ATHOC was under the contractual obligation (either written, for those members of its staff who had the provision included in their contracts, or oral, for the remaining staff who received a verbal assurance to that effect) to pay all amounts of the insurance contract free of tax. Even if the money paid were subject to tax, ATHOC should have paid same to the state, before giving the remaining amount to its employees, who received it believing that it was not subject to any tax.
    It becomes obvious from the above, that the Greek State claims from former employees, 8 whole years after the successful completion of the Olympic Games, monies that an organization 100% state owned had the contractual obligation to pay tax free….

  31. Just to ad some self evident for EU comments (but not Greece)
    – if the Athens04 employees knew of any possible future obligation to the State in 2004/05, there would be a different financial forecasting from what they did with their money – instead the State even issued tax-declarations for those who eg took mortgage loans and most are short in cash today (due to the crisis, unemployment etc)
    – if the employees knew of special tax treatments to the 4 top-managers and imminent judgements on tax issues for them in 2006/07, there would still be time to provide
    – in the middle of a 4+ years financial crisis, what is happening today is plainly inhuman and unjust
    The (greek) tragedy (or comedy) is that the 2004 Culture (and thus Olympics responsible) minister Mr Venizelos, is the one who has been avoiding to support the A04 employees’ questions as Minister of Finance (avoiding political exposure during crisis!!!) and he is now a party leader in the government coallition. Ridiculous in any structured society – understandable only in ridiculous states

    Consequently, since it seems that Greece will not be ousted from the EU finally, the Athens 2004 employees will need to seek their rights on an EU level

  32. All sadly true. I am an international lawyer with decades of experience abroad and not given to ranting, but am disgusted by such a blatant and criminal miscarriage of justice. Greece’s legal system is a bordello, especially in relation to this Athens2004 Olympics case. Vicky S. puts the issue concisely.
    One correction I have to many of the comments is that they often use the word “unjust” which suggests that it might be legal but seems unfair; let’s be clear: the actions taken by the government here would NOT be legal in any civilized, sophisticated country (and in fact are not either here, but in this toy country now whatever is done is just done).
    Another point that I did not read in the comments which is also relevant and interesting is that those people who received the tax free payment did so only because it was part of the deal with the government that they would receive this money only if they remained employed until the end of the Games. This was to prevent employees from leaving Athens 2004 work before the Games and not having enough people to put on the Games (this was a problem in previous Olympics) because waiting until after the Games instead of leaving before the Games would mean employees would not find jobs or would find low paying jobs. So, employees made the determination of whether or not to stay and work at Athens 2004 until after the Games were over based on whether the tax free money would make up for what they were losing by staying. If the circumstances had been at that time as the government decided it is now (8 years later) for tax purposes, many of these people would have left Athens 2004 before the Games and Greece would not have had the people to put on those fantastic Games. Ironic? Filthy.

  33. Author DA mentions that we received the tax free payment – in fact we received the payment and a statement from the insurance company issuing the payment (as it was the return part of the money paid against the insurance) that according to article … of law.., this amount had already been taxed by 15% and was therefore free from any further taxation!

  34. It is unfortunate that we were born in a country of a great past but such a uncertain future, where talent and ambition are penalized and capabilities are severed by the petty minded people. No need for me to say that the tax system in Greece is unfair, targets the middle class, the pensioners and the public servants but does not touch the culprits of the crimes committed against our future and our children’s future. People think that we bacame rich working for the Games. Not true and I speak for myself, it was a great working experience but you would only apply it abroad, because your own country rejected you, denied you even the pleasure to brag about it.
    I have collected 10,000 euro and the IRS is asking for 7.000 euros. I am earning less that 25,000 euros a year and have to be able to live and raise my family. Someone said that the money we have to pay is not the issue, Well! it is the issue, because if you don;t pay, they will take your home along with your dreams away. This is what happens in Greece right now, they invest in people’s fear and despair. We are the perfect example of an uneccessary sacrifice.

  35. Having been a former ATHOC employee myself too, I fully agree with the opinions expressed above. Unfortunately, injustice is prevalent and we’ve all been victims of it. However, let’s hope that justice will be done in the end.

  36. Egalitarianism = equality of rights.
    I don’t understand why the Greek Government cannot treat a certain group of citizens in the same way with some other equal groups!! For instance, why employees in a company, who are covered with the SAME insurance policy contract, from the SAME insurance company (ALICO) the bonus they receive at the end of their career is NOT taxable, in the case (AND ONLY IN THAT CASE) of the ATHENS 2004 O.C.O.G. have to pay income taxes!! Or, why some employees of the SAME Organizing Committee, (Members of the Board), covered by the SAME insurance contract, enjoy DIFFERENT treatment, by naming their SAME bonus as “compensation” (20% payable) and not as “income” or “salary grade” (40+%). Unless this is a new concept for “Equality” and “New-Democratization” in practice….!!!!

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