President Anastasiades’ announcement, while attending an event to mark the 91st anniversary of Apoel on Wednesday night, that the Council of Ministers had approved writing off tax debts of football clubs, amounting to €19.5 million, came as no surprise. Coming up with different ways of squandering the taxpayer’s money is an integral part of his re-election campaign.
The next day finance minister Harris Georgiades announced that the government would be making €25 million available for the “partial alleviation” of the effects of the banking crisis of 2013. The government would consider the transfer of other unused state assets to the National Solidarity Fund, which will make payments to the haircut victims such as Laiki bank depositors and the bank bondholders. This was not a scheme to compensate people, but to “safeguard social cohesion.”
This electoral money-wasting scheme would safeguard nothing because the victims of the banking crisis are not necessarily the poorest members of our society. The government could not have described it as a compensation scheme because it would have had to explain how it proposed to come up with €9.5 billion that were lost in the deposits haircut and bankruptcy of Laiki. Instead, it has gone for a gesture, to show that it wants to help the haircut victims.
The cost of this electoral gesture to the taxpayer is a paltry €25 million, which will be added to the €20 million that will be paid as a Christmas bonus to recipients of welfare payments and low-income pensioners. At least for the welfare bonus, the government could claim, more plausibly, it would safeguard social cohesion.
But what would writing off the tax debts of football clubs safeguard? Perhaps the idea that football clubs are entitled to special treatment by state and apart from collecting a big annual subsidy do not have to settle their tax debts. The government tried to muddy the waters, arguing that these were old debts, pre-dating 2007, that the government of time decided it would not collect. As the state was never going to collect these debts, Georgiades explained, the government decided to write them off.
Are we expected to accept this ludicrous explanation, because there will be elections in a couple of months? Georgiades claimed the debts were written off, as a previous government had decided not to collect then, within the framework of tidying up public finances. He added: “With this clarification, I hope it is understood that no taxpayer is exempted from fulfilling his obligations.” How convincing is such a statement, made immediately after a decision to write off tax debts of €19.5 million and announced during one of the president’s election gatherings?