In what has been described as a scandalous turn of events, the Greek Parliament adopted on 22 May 2016 an amendment to Article 8 of Law 3213/2003 (as part of a 7 500-page economic reform package), under which ministers, members of parliament, mayors and functionaries found to be holding stakes in offshore companies had previously faced prison sentences, fines and disbarment from public office.
Under the new legislation, they are now are permitted to own or hold shares in such companies in offshore jurisdictions such as the British Virgin Islands, the Cayman Islands, Guernsey, Jersey and 25 other countries offering a preferential tax regime, provided that they are deemed to be cooperating with the Greek tax authorities.
There are now no restrictions on the type of company in which politicians are allowed to hold stakes, whereas government ministers were previously not allowed to own Greek or offshore companies.
Furthermore, politicians and functionaries previously engaging in what were then illegal practices incurring severe penalties will not now be prosecuted.
In view of this:
1. Can the Commission say whether the amendment was imposed as a memorandum requirement for loan payments to Greece?
2. What view does the Commission take of this new legal provision that is favouring the flight of capital to tax havens and eroding the tax base in Greece?