There are 2,000 Greeks said to have accounts in a Swiss bank, according to the Greek magazine, Hot Doc. The list was published on Saturday, and the speaker of the Greek Parliament, several employees of the Finance Ministry and a number of business leaders are on it.

The list was passed on by Christine Lagarde, then the French finance minister and now the head of the International Monetary Fund, to her Greek counterpart in 2010 to help Greece crack down on rampant tax evasion. Allegations say it was well known by some current and former government officials. The 2,059 people on the list are said to have had accounts in a Geneva branch of HSBC.

Last week, former Finance Minister George Papaconstantinou told lawmakers that he had asked Greece’s financial crimes unit to investigate about 20 Greek citizens thought to hold large deposits at the HSBC Geneva branch in October 2010.

As questions about the handling of the original list reached a frenzy in Athens, where two former finance ministers were pressed to explain why the government appeared to have taken no action on the list, the news has touched a nerve among average Greeks as the Parliament is expected to vote on a new 13.5 billion euro austerity package.

If to have an account at HSBC is not illegal, or proof of evading Greek taxes, people point out that Greek officials should check whether the subjects on the list had moved money into the accounts to escape paying taxes.

According to Hot Doc, the list includes people in the government and businesspeople, but also actors, doctors, lawyers and architects; as well as several women identified as housewives.

A few hours after the magazine was published, Athens prosecutors issued a warrant for the arrest of Kostas Vaxevanis, the owner and editor of Hot Doc, on misdemeanor charges related to violating the privacy of those on the list.

Mr. Vaxevanis, a famous investigative journalist, said in an interview that was uploaded on the Internet, that  he was being wrongly targeted: “Instead of arresting the tax evaders and the ministers who had the list in their hands, they are trying to arrest the truth and free journalism.”

There was no official comment from Prime Minister Antonis Samaras, or from anybody from the fragile three-way coalition government, even if Evangelos Venizelos is one of two Socialist former finance ministers accused of not having acted on the information.

On Friday, the office of former Prime Minister George Papandreou denied claims that he had been aware of the list, after a member of the opposition Syriza party stated that Mr. Papandreou had helped set up a meeting with the head of the Geneva HSBC branch in Geneva when he was in office.

Giorgos Voulgarakis, the speaker of the Parliament from Mr. Samaras’s center-right New Democracy party who is apparently on the list, denied having any overseas bank accounts and accused Hot Doc of mudslinging.  According to Hot Doc, the parliamentary speaker opened an account at HSBC in 2003 that was jointly managed by him, his wife and an offshore company based in Liberia.

Mr. Stournaras, the finance minister, sent a letter to his French counterpart several days ago asking for the original list. His assistant said that the Greek Finance Ministry wants to be certain that it has the original list of names before investigating whether any tax evasion occurred. The list dates to 2007.

It is certain this news will take the attention of the Greek population and politicians for the next weeks. It could not come in a worse time, as within the week European finance ministers are scheduled to discuss the possibility to release billions of Euros in fresh financial aid, but at the price of new austerity measures demanded by Greece’s lenders.

Addressing the cabinet, which convened to discuss the austerity package, Samaras said the government was determined to push growth measures, such as privatizations, structural reforms and boosting investments.

“If we only focus on the cuts, without any growth measures, we are at risk of the recession spreading to eight years, which would result in economic output having contracted by 30%,” the prime minister reportedly said.

Maanwhile, cabinet formally approved the package of EUR 11.7 billion in spending cuts, that includes drastic cuts to salaries and subsidies in public utilities, ending holiday payments for all pensioners and increases in public transport fares. The list will then receive a final sign-off today by the coalition leaders.

According to media reports, EUR 4.6 billion are earmarked from reduced pensions, EUR 1.39 billion from health, EUR 1.32 billion from state salaries and EUR 1.27 billion from administrative costs. Also, public-sector wage expenditure will be cut by EUR 3.3 billion by applying a 12% cut to the special salaries enjoyed by certain categories of civil servant, resulting in savings of EUR 360 million, while another EUR 339 million will come from cutting what remains from 13th and 14th salaries. In addition, the unified pay scale for all civil servants will be introduced a year earlier than planned, which will result in EUR 120 million euros in savings.

EUR 274 million in savings over the next two years will come from cuts in the salaries of 68,000 employees in public utilities companies by 30% savings, along with a reduction in state subsidies to these companies. Labour reserve scheme would save EUR 167 million and freeze on all promotions in the military and police will save EUR 165 million.

According to protothema.gr, the troika’s technical team has expressed serious concerns as regards the effectiveness of measures EUR 1.4 billion included in the austerity package. For instance, troika specialists have questioned the government’s ability to reduce pharmaceutical expenditure even further (EUR 450 million), given EOPYY’s debts towards the private sector have already skyrocketed. Also, EUR 500 million in defence cuts seem problematic to them, due to strict terms and conditions included in defence contracts. Further, they say that further cuts in operational expenses in the public sector is a measure they keep hearing too often by the Greek government but no results were ever produced (EUR 500 million). At the same time, private sector’s receivables from the state have reached EUR 7 billion. Finally, the troika’s technical team asked to exclude the forecast of EUR 2 billion revenues from battling tax evasion.

“I think more of the little kids from a school in a little village in Niger who get teaching two hours a day, sharing one chair for three of them, and who are very keen to get an education,” she said in an interview with UK-based Guardian newspaper.

“I have them in my mind all the time. Because I think they need even more help than the people in Athens,” she added.

In her interview she said Greeks “have to pay their tax,” adding that she thought “equally” about those deprived of public services by the crisis and those involved in tax avoidance.

“As far as Athens is concerned, I also think about all those people who are trying to escape tax all the time,” Lagarde said.

Tax evasion is considered a major issue in Greece, with the government earlier this year publishing a list of more than 4,000 wealthy individuals it said owed the state more than $14bn, according to Al Jazeera. Greece, in its fifth year in recession, has been struggling to apply tough austerity measures in exchange for EU-IMF bailout packages. The country has witnessed widespread cuts of up to 40 percent of pensions and minimum wages.

Asked by the newspaper of whether it was “payback time” for Greece , she responded, “That’s right”.

Greece is on the verge of getting kicked out of the eurozone as the Radical Left Coalition, Syriza, which is leading in opinion polls for June 17 elections, has promised to reject the terms of the bailout.

Double tax treaties are agreements to prevent taxing income twice by allocating taxing rights over this income between two countries. These types of treaties play a key role in encouraging investment and technology transfer, while allowing governments to retain taxing rights over the money that comes from those investments.

“International law places very few limits on the taxation sovereignty of countries,” Alex Trepelkov, Director of the Financing for Development Office in the Department of Economic and Social Affairs (DESA), told reporters at a press conference in New York. He added that income from cross-border investments may be taxable in both investor and recipient countries, something which can be prevented by setting adequate measures in place. “Double tax treaties play a key role in encouraging investment while allowing governments to retain appropriate taxing rights over the income deriving from those investments,” said Mr. Trepelkov.

Armando Lara Yaffar, Chairperson of the Committee of Experts on International Cooperation in Tax Matters, stressed that “the main objective of the revision of the UN Model has been to take into account recent developments in the areas of international tax policies relevant for both developed and developing countries.” Yaffar emphasized that one of the key elements of the UN Model is its aim to facilitate entry into bilateral tax treaties by developing countries, which would contribute to attaining their development goals.

The revised model, which had not been updated since 2001, also provides recommendations on how to combat corporate tax evasion as well as a set of rules for countries seeking to invest in developing countries.

According to a survey of 145 countries carried out by the Tax Justice Network, the cost of tax evasion last year amounted to $3.1 trillion in tax losses, which represents over 50 per cent of all of the countries’ combined healthcare costs.