Analysis of the €123 Billion Debt

According to lists released by the Independent Authority for Public Revenue (AADE) a few days ago, the debts of individuals and legal entities to the State and EFKA amount to €123 billion. These are debts from so-called major debtors, those who owe over €150,000 and whose payments are delayed by more than a year.

These debts represent about half of Greece’s GDP, which stands at €220.3 billion. However, the potential recovery of these €123 billion is bleak, considering the companies and entrepreneurs listed.

Many of these companies have been bankrupt or inactive for decades, and some individuals left behind significant debts despite having once been prominent in high society. Even though some enforcement actions were taken, mainly for bank debts, collections were minimal. In some cases, the state inherited certain assets, only to later find itself listed as a debtor in electronic auctions.

Who Are They?

The list of individuals owing over €150,000 to the tax office and social security funds includes 11,109 AFM this year, compared to 10,168 in 2023. Similarly, the list for legal entities includes 18,095 debtors, compared to 16,839 last year.

Their debts to the State amount to €102.3 billion, while those to EFKA are €20.78 billion.

The Unresolved Issue of Collectibility

A significant question remains about how much of these billions are collectible. Realistically assessing and updating these lists is necessary, but writing off debts is bureaucratically challenging and politically sensitive. Each year, the same names appear on these lists, including long-defunct companies like ΧΡΩΠΕΙ, Olympic Airways, the Organization for the Reconstruction of Enterprises (OAE), Minion, Piraiki-Patraiki, Aegeon, and various sports clubs like AEK and Iraklis.

Prominent Cases

Akropolis Brokerage

Akropolis Brokerage tops the lists with total debts of €13.83 billion, of which €5.51 billion are primary debts and €8.32 billion are fines. The company was involved in the structured bonds scandal between 2007 and 2010. Despite most participants being acquitted, the company faced a €5.5 billion fine for fictitious transactions involving the sale of fixed-rate bonds worth €180 million to the TEADY fund.

Lakis Gavalas

Designer Lakis Gavalas, despite losing his assets and serving 15 months in prison, still owes €33.4 million to the State and €3.94 million to EFKA. His downfall was due to a large property investment in Kantza that led to substantial debts as the market collapsed and his company mismanaged finances.

Clothing Industry

Brothers Hatzigiannou (Sprider Stores) owe €330.58 million to the State and €11.65 million to EFKA. The brothers’ company, which started from humble beginnings, faced significant losses due to the economic crisis. Similarly, the Glou brothers (Glou stores) owe €31.85 million to the State and €8.71 million to EFKA. Their company, once thriving with numerous stores, struggled with financial difficulties and eventually collapsed.

Construction Industry

In the construction sector, companies like Babis Vovos International Construction owe €49.2 million, and the once-mighty ATTIKAT, headed by Panagiotis Panousis, owes €185.15 million. The latter, despite significant projects and a stock market listing, eventually faced insurmountable financial issues, leading to its downfall.

Giannis Karouzos

Giannis Karouzos, associated with a major real estate scandal, has multiple companies listed with debts exceeding €150 million. His model involved creating a “galaxy” of companies for property investments, leading to significant tax evasion and loan defaults.

Athanasios Papistas, a significant figure in the business world, had been involved in various legal disputes and financial issues throughout his career. Papistas, through his company Anthemias, is reported to have played a central role in the acquisition of land from the Vatopedi Monastery during 2006-2007. This case became a major news topic, leading to the formation of two parliamentary investigation committees. In 2017, the 14 individuals involved, including Papistas, were acquitted by the judiciary. Around 2013, Papistas was also in a legal dispute with Vodafone regarding his company, Mobile Trade Stores, which provided technical support services. This case was resolved a few years later, with Papistas withdrawing the lawsuits he had filed. Last year, Papistas faced foreclosure actions against a significant commercial property owned by his company, Developmental Real Estate S.A., in Thessaloniki. This was not just any property but the building that houses the city’s morgue. On December 13, a four-story maisonette he owned in Agios Athanasios, Pella, was auctioned with a starting price of 231,000 euros and was sold for 231,010 euros.

Conclusion

These lists reveal the persistent issue of major debtors whose collectibility remains doubtful. The economic impact of these unresolved debts is substantial, representing a significant challenge for the state’s revenue system.

George Koskotas – €2.44 million