The progress recorded in reducing Greece’s fiscal deficit this year has been achieved solely through lower primary spending and cuts in public investment. In contrast, the figures for the 2006 budget, which the government presented yesterday, show that further progress is expected via a rise in revenues, projected at 7.9 percent – equal to the rise in the gross domestic product in current prices – against only 5 percent this year. Is the optimism reflected in this projection justified? In Brussels there seems to be some skepticism, but those who keep a close watch on the workings of the Finance Ministry are also in some doubt. For revenues to rise by 4.6 billion euros to 46.5 billion, the government first needs strong political will to clash with vested interests and the rackets that feed on tax evasion and illegal trading; second, an incorruptible tax department must be in place. I am afraid that both prerequisites leave a lot to be desired. It cannot be a coincidence that whereas three months ago the Finance Ministry triumphantly announced that cross-checking of value-added tax data had revealed big gaps in the declared earnings of no less than 4,500 large enterprises, not one name of a tax evader has been released thus far. What power silences and freezes inspections? Is it not unbelievable that a minister can openly admit that «tax thieves in Greece go unpunished» but that the responsible departments refuse to produce the evidence for the case to go to court? Economy and Finance Minister Giorgos Alogoskoufis has yet to restore penal sanctions for the companies using bogus invoices, which were abolished soon after the government came to office last year. Even big banks, including those under state control, engage in the sport of tax avoidance, escaping payment of 100 million euros in taxes by merging with their subsidiaries. They also do not retain taxes on their clients’ bond incomes. All this is happening when Greece is facing the prospect of a tough battle in the Ecofin ministers’ council in January to avoid a fine for not meeting the targets of fiscal rehabilitation.