Corruption adds up to an estimated 4 bln euros a year

The annual cost of graft in Greece exceeds the measures adopted for 2012 for cuts in pensions and salaries, according to recent official figures and reports published by international organizations that estimate the size of corruption in Greece at some 4 billion euros a year, while the broader illegal economy is worth another 65 billion, or greater than the amount saved by measures in both the first and second memorandum.

Money-laundering rackets uncovered in 2011 alone were processing 223 million euros, while Kathimerini has learned that in the first three months of 2012, authorities located 50 million euros’ worth of revenues that were being hidden in one way or another from the tax man. The amount of illegal money traced by the tax authorities and the special task force for money laundering has more than doubled in the past year, the main reason being that tax evasion has only recently been included in calculations for the illegal economy. Therefore, it is estimated that around 200 million euros may be lost in tax revenues alone, a figure based on inspections of private assets and origin of wealth declarations.

However, the annual cost of corruption is much, much bigger, and it arises from the “light industry” of palm greasing in the public sector to the “heavy industry” of kickbacks for large public purchases, smuggling and drug dealing. Transparency International Greece has estimated that the volume of under-the-table payments to public sector employees, doctors etc came to more than 500 million euros in 2011.

Calculations made over the last five years by the World Bank estimate that under-the-table payments made by businesses in Greece to get any number of jobs expedited or actually done come to 500 million euros, while a survey of 550 Greek businesses found that 0.2 percent of their sales volume is destined for palm greasing, while the standard kickback for a deal with the public sector is believed to stand at an average of 0.8 percent of its total value.

The latest report on the issue by the World Bank found that 21.6 percent of Greek businesses pay to get procedures expedited, 55.9 percent expect to be asked for a certain something from tax inspectors, and 14.5 percent see giving a kickback for a state contract as an absolute prerequisite. What do these percentages translate into in cash? To put the figures into some perspective, in 2010 the annual turnover of Greek businesses came to 190 billion euros. From this amount, 0.2 percent of sales volume in palm greasing means 380 million euros. In the same year, the volume of public contracts, public works and public procurements came to around 5-7 billion euros, meaning that 0.8 percent of this comes to 56 million euros.

At the same time, figures collected by the Financial Crimes Squad (SDOE) indicate that another 3 billion euros a year are pumped into the illegal economy from drug and gun dealing, fuel, cigarette and alcohol smuggling, and extortion, bringing the corruption to 4 billion euros a year. 

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