Greece

Discussion in 'Politics & Diplomacy' started by LAz, Jun 22, 2012.

  1. LAz

    LAz Active Member

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    So what d'you folks think about Greece?


    It's so sad to me. Always hanging by a thread...
    ...I think it would be best if they just kicked them out of the eurozone. :/
     
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  2. GenerationW

    GenerationW Senior Member

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    For all its talk, the EU doesn't want to kick them out. If it were to go smoothly, that would pave the way for other countries to leave. If it went badly, it could lead to a worldwide recession/depression.
     
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  3. Urban Shocker

    Urban Shocker Doyenne

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    Could we not chip in a few dollars and help them out? We could buy a comely ruin, or a nice little island like Tinos, maybe.
     
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  4. js97

    js97 Senior Member

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    They are done... my buddy just came back from visiting, and there is complete social unrest.

    No one is paying their taxes (because they have no confidence in government). From income to property taxes. Government agencies are not enforcing... it's a vicious cycle of the overly 'socialized' country...

    Their just waiting for the rest of europe and the world to bail them out.
     
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  5. Admiral Beez

    Admiral Beez Senior Member

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    With the exception of black or grey market jobs and billioniares hiding money offshore, how are people avoiding paying their taxes? Do they not have payroll tax deduction and VAT like we do in Canada? If there are tons of legal or tax code loopholes then it's up to the government to close those.

    In Canada I can't imagine how I could avoid paying taxes, they get to my pay cheque before I do, and there's GST on near everything, plus fuel taxes, property taxes, etc.
     
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  6. avenirv

    avenirv New Member

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    you go to a doctor. payment is cash so no trace. the goverment even came with some cases of doctors declaring a couple of thousand euro anual income for years but holding huge palaces with swiming pools, driving bmw's, etc. in fact the goverment took aerial photos and made them public. but these are more publicity stunts.
    if a lot of things are paid cash and nobody issueing invoices then a lot of taxes are lost. and this is done by many, many people except multinational companies.
    politicians know and do the same thing.
    but greece did this thing with debt since they became independent. it seems the first debt the new greek republic needed close to 100 years to pay.
    they played their strategic position. but now ussr is gone so their strategic position is going down. they are trying to play some games with israel based on the natural gas and oil stuff around cyprus and the break between turkey and israel. will it play well ? will israel help them ? who knows ?!
    they spend a lot of money on the army which is geared against their nato coleague turkey.
     
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  7. KDP

    KDP New Member

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    Okay, this is from "Boomerang" by Michael Lewis (aka the moneyball guy), and he explains greece's problems pretty well:


    I'd arrived in Athens just a few days earlier, exactly one week before the next planned riot, and a few days after German politicians suggested that the Greek government, to pay off its debts, should sell its islands and perhaps throw some ancient ruins into the bargain. Greece's new socialist prime minister, George Papandreou, had felt compelled to deny the he was actually thinking of selling any islands. Moody's, the rating agency, had just lowered Greece's credit rating to the level that turned all Greek government bonds into junk- and so no longer eligible to be owned by many of the investors who owned them. The resulting dumping of Greek bonds onto the market was, in the short term, no big deal, because the International Monetary Fund and the European Central Bank had between them agreed to lend Greece- a nation of about eleven million people, or two million fewer than Greater LA- up to $145 billion. In the short term Greece had been removed from the free financial markets and become a ward of other states.

    That was good news. The long-term picture was far bleaker. In addition to its roughly $400 billion (and growing) of outstanding government debt, the Greek number crunchers had just figured out that their givernment owed another $800 billion or more in pensions. Add it all up and you got about $1.2 trillion, or more that a quarter-million dollars for every working Greek. Against $1.2 trillion in debts, a $145 billion bailout was clearly more a gesture than a solution. And those were just the official numbers; the truth is surely worse. "Our people went in and couldn't believe what they found", a senior IMF official told me, not long after he'd returned from the IMF's first Greek mission. "The way they were keeping track of their finances- they knew how much they had agreed to spend, but no one was keeping track of what he had actually spent. It wasn't even what you would call emerging economy. It was a third world country".

    As it turned out, what the Greeks wanted to do, once the lights went out and they were alone in the dark with a pile of borrowed money, was turn their government into a pinata stuffed with fantastic sums and give as many citizens as possible a whack at it. In just the past tweleve years the wage bill of the Greek public sector has doubled, in real terms- and that number doesn't take into account the bribes collected by public officials. The average government job pays almost three times the average private-sector job. Tha national railroad has annual revenues of 100 million euros against an annual wage bill of 400 million, plus 300 million euros in other expenses. The average state railroad employee earns 65,000 euros a year. Twenty years ago a successful businessman turned minister of finance named Stefanos Manos pointed out that it would be cheaper to put all Greece's rail passengers into taxicabs: it's still true. "We have a railroad company which is bankrupt beyond comprehension," Manos put it to me. "And yet there isn't a singe private company with that kind of average pay." The Greek public-school system is the site of breath-taking inefficiency: one of the lowest-ranked systems in Europe, it nonetheless employs four times as many teachers per pupil as the highest ranked, Finland's. Greeks who send their children to public schools assume they will need to hire private tutors to make sure they actually learn something. There are three government-owned defense companies: together they have billions of euros in debts, and mounting losses. The retirement age for Greek jobs classified as "arduous" is as early as fifty-five for men and fifty for women. As this is also the moment when the state also begins to shovel out generous pensions, more than six hundred Greek professions somehow managed to get themselves classified as arduos: hairdressers, radio announcers, waiters, musicians, and on and on and on. The Greek public health-care system spends far more on supplies than the European average- and it is not uncommon, several Greeks tell me, to see nurses and doctors leaving the job with their arms filled with paper towels and diapers and whatever else they can plunder from the supply closet.

    Where waste ends and theft begins almost doesn't matter; the one masks and thus enables the other. It's simply assumed, for instance, that anyone who is working for the government is meant to be bribed. People who go to public health clinics assume they will need to bribe doctors to actually take care of them. Government ministers who have spent their lives in public service emerge from office able to afford multi-million-dollar mansions and two or three country homes.

    oddly enough, the financiers in Greece remian more or less beyond reproach. They never ceased to be anything but sleepy old commercial bankers. Virtually alone among Europe's bankers, they did not but buy US subprime-backed bonds, or leverage themselves to the hilt, or pay themselves huge sums of money. The biggest problem the banks had was that they had lent roughly 30 billion euros to the Greek government- where it was stolen or squandered. In Greece the banks didn't sink the country. The country sank the banks.
     
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  8. KDP

    KDP New Member

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    More:

    A handful of the tax collectors, however, were outraged by the systemic sorruption of their business; it further emerged that two of them were willing to meet with me.
    .....

    Tac Collector No. 1: He just took for granted that I knew that the only Greeks who paid their taxes were the ones who could not avoid doing so- the saleried employees of corporations, who had their taxes withheld from their paycheques. The vast economy of self-employed workers- everyone from doctors to guy who ran the kiosks that sold the "International Herald Tribune"- cheated (one big reason why Greece has the highest percentage of self-employed workers of any European country). "It's become a cultural trait," he said. "The Greek people never learned to pay their taxes. And they never did because no one is punished. No one HAS EVER BEEN punished. It's a cavalier offense- like a gentleman not opening a door for a lady".

    The scale of Greek tax cheating was at least as incredible as its scope: an estimated two-thirds of Greeks doctors reported incomes below 12,000 euros a year- which meant, because imcomes below that amount wern't taxable, that even plastic surgeons making millions a year paid no tax at all. The problem wasn't the law- there was a law on the books that made it a jailable offense to cheat the government out of more than 15,000 wuros- but its enforcement. "If the law was enforced", the tax collector said, "every doctor in Greece would be in jail." One reason no one is ever prosecuted- apart from the fact prosecution would be arbitrary, as everyone is doing it- is that the Greek courts take up to fifteen years to resolve tax cases. "The one who does not want to pay, and who gets caught, just goes to court." Somewhere between 30 and 40 percentof the activity in the Greek economy that might be subjected to income tax goes officially unrecorded, he says, compared with an average of about 18 percent in the rest of Europe.

    The easiest way to cheat on one's taxes was to insist on being paid in cash, and fail to provide a receipt for services. The easiest way to launder cash was to buy real-estate. Conveniently for the black market- and alone among European countries- Greece has no working land registry. "You have to know where to guy bought the land- the adress- to trace it back to him. And even then its all handwritten and hard to decipher". But, I say, if some plastic surgeon takes a million in cash, buys a plot on a Greek island, and builds himself a villa, there would be other records- say, building permits. "The people who give building permits don't inform the Treasury", he responds. In the apparently not-so-rare cases where the tax cheat gets caught, he can simply bribe the tax collector, "but if you get caught, it can take seven or eight years to get prosecuted. So in practice no one bothers."

    The systemic lying about one's income had led the Greek government to rely increasinglyon taxes harder to evade: real estate and sales taxes. Real estate is taxed by formula- to take the tax collectors out of the equation- which generates a so-called objective value for each home. The boom in the Greek economy over the last decade caused the actual prices to which property changed hands to far outstrip the computer-driven appraisals. Given higher actual sales prices, the formula is meant to ratchet upward. The typical Greek citizen responded to the problem by not reporting the price at which the sale took place but instead reporting a phony price- which usually happened to be the same low number at which the dated formula had appraised it. If the buyer took out a loan to buy the house, he took out a loan for the objectivevalue and paid the difference in cash, or with a black-market loan. As a result the "objective values" grotesquely understate the actual land values. Astonishingly, it's widely believed that all three hundred members of the Greek parliment declare the real value of their houses to be the computer-generated objective value. Or, as both the tax collectors and a local real estate agent put it to me, "every single member of the Greek parliment is lying to evade taxes."

    On he went, describing a system that was, in its way, a thing of beauty. It mimicked the tax-collecting systems of an advanced economy- and employed a huge number of tax collectors- while it was in fact rigged to enable an entire society to cheat on their taxes. As he rose to leave, he pointed out that the waitress at the swanky tourist hotel failed to provide us with a receipt for our coffees. "There's a reason for that," he said. "Even this hotel doesn't pay the sales tax it owes."

    Tax Collector No. 2: He arrived with a binder full of papers, only his was stuffed with real-world examples not of Greek people but Greek companies that had cheated on their taxes. He then started to rattle off examples ("only the ones I personally witnessed"). The first was an Athenian construction company that had built seven giant apartment buildings and sold off nearly a thousdand condos in the heart of the city. Its corporate tax billhonestly computed came to 15 million euros, but the company had paid nothing at all. Zero. To evade taxes it had done several things. First, it never declared itself a corporation; second, it employedone of the dozens of companies that do nothing but create fraudulent receipts for expenses never incurred and then, when the tax collectors stumbled upon the situation, offered him a bribe. The tax collector blew the whistle and referred the case to his bosses- whereupon he found himslef being tailed by a private investigator, and his phones tapped. In the end the case was resolved, with the construction company payiong 2,000 euros. "After that I was taken off all tax investigations," said the tax collector, "because I was good at it."

    He returned to his thick binder full of cases. He turned the page. Every page in his binder held a story similar to the one he had just told me, and he intended to tell me all of them. That's when I stopped him. I realized that if I let him go on we'd be there all night. The extent of the cheating- the amount of energy that went into it- was breathtaking. In Athens, I several times had a felling new to me as a journalist: a complete lack of interest in what was obviously shocking material. I'd sit down with someone who knew the inner workings of the Greek government: a big-time banker, a tax collector, a deputy finance minister, a former MP. I'd take out my notepad and start writing down the stories that spilled out of them. Scandal after scandal poured forth. Twenty minutes into it I'd lose interest. There were simply too many: they could fill libraries, never mind a book.

    The Greek state was not just corrupt but corruptin. Once you saw how it worked you could understand a phenomenon that otherwise made no sense at all: the difficulty Greek people have saying a kind word about one another. Individual Greeks are delightful: funny, warm, smart, and good company. I left two dozen interviews saying to myself, "What great people!" They do not share the sentiment about one another: the hardest thing to do is to get one Greek to compliment another behind his back. No success of any kind is regarded without suspicion. Everyone is pretty sure everyone is cheating on his taxes, or bribing politicians, or taking bribes, or lying about the value of his real estate. And this total absence of faith in one another is self-reinforcing. The epidemic of lying and cheating and stealing makes any sort of civic life impossible; the collapse of civic life only encourages more lying, cheating and stealing. Lacking faith in one another, they fall back on themselves and their families.

    The structure of the Greek economy is collectivist, but the country, in spirit, is the opposite of a collective. Its real structure is every man for himself. Into this system investors had poured hundreds of billions of dollars. And the credit boom had pushed the country over the edge, into total moral collapse.
     
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