Horst Reichenbach can save Greece almost a billion

HORST REICHENBACH, HEAD OF THE EUROPEAN COMMISSION TASK FORCE

Πηγή: New Europe
April 21 2013

The Greek government is desperately trying to collect the last cent from starving Greeks and it is managing pretty well, so far, despite the high political cost for the sitting prime minister and his ruling coalition.

There is an amount of over €700 million in VAT taxes, withheld by the Athens International Airport (AIA S.A.), a privately managed profit making company. The airport company refuses to pay this amount to the state on the excuse that law 2338/95 which ratified the concession agreement for the construction and operation of the Athens airport, provides that the Greek government undertakes the obligation to refund to the company any VAT that the company pays.

The aim of this provision was however, to refund the VAT that AIA SA would pay to the constructors since the airport is the property of the State and given by concession to AIA SA for a period of 30 years.

Under these circumstances, the fiscal authorities from 2001 onwards, when the airport started its operations (under a private company) asked AIA SA to pay the VAT, which was refused. The matter was dealt with by the Council of State, which ruled that AIA SA must pay VAT. In an effort to avoid payments, the airport company took the issue to the Arbitrary Court of London, which refrained from taking a clear position as VAT issues are exclusively under EU jurisdiction.

Indeed EU law provides, with Directive 2006/112/EC, that all EU based companies are subject to VAT payments (part of VAT ends up in the Community budget).

EU law is above any and all national laws and constitutions, and it goes without saying that the only way to avoid VAT payment is to get a exception or a temporary derogation by amending the Directive. This implies unanimity of 27 Ministers of Economy of the Member States (EcoFin).

Our legal counselor examined all 414 articles of the codified text of Directive 2006/112/EC and all its annexes and found no VAT exception or derogation for AIA S.A. Thus, AIA S.A. must pay to the Greek State the long overdue VAT, end of file.

If for any reason, however, AIA S.A. thinks otherwise, the good company has the right to appeal to the European Court of Justice in Luxembourg, only.

Under the circumstances, as head of the Commission’s Task Force in Greece Horst Reichenbach, can explain to the Greeks what exactly is the situation about the obligations of AIA S.A. regarding VAT payments.

The Head of the Task Force in Greece is the right person to explain it, since when law 2338/95 was passed in Greece, he was at the time the Head of Cabinet of then Regional Policy Commissioner, Monika Wulf-Mathies and provided for a cohesion fund co-financing for the construction of the airport to AIA S.A. Thus he is well aware that such an exception for AIA S.A. from VAT does not exist.

Horst Reichenbach, who subsequently served in the European Commission as Director General for Administration knows also very well how to read a Directive and thus can easily explain to the Greek government their obligation to collect at once the VAT owed by AIA S.A.

The government has the means to collect the money immediately (arrest of the CEO, confiscation of assets, etc.).

The airport, a private law monopoly company with the highest charges in continental Europe, must have the cash flow to pay. Indeed, with less than 500 employees and no other expenses with accumulated revenues of over €4 billion since 2001, the company is able to pay its VAT obligations and much more.

Germany is holding Greece to ransom

French President Francois Hollande (L) speaks with German Chancellor Angela Merkel (R) during a meeting with partner nations in Chicago during the NATO 2012 Summit on May 21, 2012.

Πηγή: Neweurope
By David Cronin
June 3 2012

Which country is a bigger drain on the European economy: Germany or Greece? Their differences in size notwithstanding, both economies are being “bailed out” with almost equal amounts of cash.

Bloomberg, not exactly a Bolshevik press agency, recently highlighted why we should have zero sympathy for the bankers of Frankfurt and Berlin. Its editors cited estimates that Germany took more than 284 billion euros from other countries in the single currency bloc between 2009 and the end of last year. Greece has so far received 340 billion euros in loans as a response to the financial crisis; just 15 billion euros of that sum came directly from Germany.

There is, of course, a fundamental difference in the way these transfers are taking place. With the exception of an occasional “haircut”, German banks have not been penalised for predatory lending; on the contrary, they are having their loans repaid at interest. Greece, on the other hand, is being required to destroy its society in order to fulfil the conditions set by the European Commission, the European Central Bank and the International Monetary Fund.

As if to emphasise that the intervention in Greece is of an imperial nature, a German civil servant has been given responsibility for administering it.

Horst Reichenbach, head of the EU’s “task force” for Greece, was in the news recently because a car used by his wife, the veteran MEP Dagmar Roth Behrendt, was set on fire outside their home in Potsdam. I condemn that act of violence without hesitation and am relieved that nobody was hurt as a result.

That attack should not be allowed distract attention from the harm that Reichenbach is inflicting on the people of Greece. Patients with rare diseases are being charged the full price for medical treatment that was previously subsidised by the state. The reason? A 10% cutback in health expenditure that Reichenbach and his puppeteers have demanded. This measure will cause far more human pain than the burning of an empty BMW.

Reichenbach’s nationality isn’t the only thing that undermines his neutrality. His curriculum vitae does, too.

For some 30 years, he was an official in the European Commission, where he climbed the hierarchical ladder until he became its director-general for enterprise and industry. In that position, he presided over a department that is secretive in many ways. Yet one thing the internal fiefdom does not conceal is that it puts the interests of big business ahead of all other considerations.

Even more problematic is that Reichenbach went on to be a vice-president of the European Bank for Reconstruction and Development.

In the interests of transparency, the EBRD should publish details of all interactions that Reichenbach had with German banks and the Berlin government during his six years with the London-based institution. The EBRD’s website gives a list of 57 financial institutions - or branches of financial institutions – in Germany that are described as “confirming banks” for its “trade facilitation programme”. Did Reichenbach help these banks in any way? If so, there could be a conflict of interests with his current job, where the agenda he follows panders to German banks.

The EBRD rarely comes under scrutiny from journalists. Most of us probably have a fuzzy idea that it has helped transition occur in central and Eastern Europe following the collapse of communism. What we don’t know is that it has sinister ideological objectives.

The organisation Bankwatch has tracked how the EBRD is infatuated with the concept of public-private partnerships hatched by the Conservative government in Britain during the 1990s. The purpose of these schemes is to give firms motivated by profit a bigger role in providing services that were previously under public management.

Defenders of the “partnerships” tend to argue that they bring greater efficiency. Experience indicates that their real purposes is to allow rapacious capitalists get control of taxpayers’ money. That has been the case with many of the “partnerships” financed by the EBRD. A sewage treatment plant for the Croatian capital Zagreb, earmarked a 55 million euros loan from the EBRD in 2001, has been plagued by delays. While the Croatian people have lost out, the private contractors (partly owned by the German energy company RWE) involved have still been paid – much more than was originally budgeted. (The price tag for the project rose from 176 million euros to almost 327 million euros between 2001 and 2007).

Recently, the EBRD has been eager to expand into the Middle East and North Africa. An assessment on Egypt carried out by the bank identifies “private sector-led, inclusive growth” as the central priority for any activities it may finance. This indicates that the EBRD is more in tune with the reviled dictator Hosni Mubarak than with the valiant demonstrators who caused his downfall last year. Mubarak also pursued the same goals to placate his chums in the West. A “structural adjustment programme” that the IMF required Egypt to implement in 1991 led to a doubling of the proportion of the population who struggled to survive on less than $2 a day.

Greece is now undergoing “structural adjustment”. Christine Lagarde, the IMF’s current chief, says she is more concerned with poor children in Africa than in Greece. Her attitude is despicable. It is the economic prescriptions that she signs that aggravate poverty throughout the world. It is thanks to her and Horst Reichenbach that experiments proven to devastate are now being repeated.