No “Shared Sacrifice” for Greek Socialists

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In Greece, a second flight from reality has begun in earnest. In Aphidnai, a small town north of Athens where local residents lost their exemption from a roadway toll due to the austerity measures forced on Greece’s debt-ridden government, a movement known as “Den Plirono” (“I Won’t Pay”) was born.  The sentiment has gone national, and many citizens brazenly refuse to pay highway tolls or bus and subway fares, which have risen 40 percent. In a country with a reputation for lax law enforcement, such a movement is apparently effective in the sense that many people are getting away with such protests.  At the same time, it is a recipe for economic suicide, as the specter of default once again looms large.

Greece is currently servicing a $159 billion bailout loan.  It’s overall debt is $491 billion in a country with 11.3 million people, which comes to $43,450 of debt per person (sound familiar?).  Last Friday, the Greek government addressed the current crisis, laying out plans to privatize some key government businesses, including Europe’s biggest betting firm, OPAP, and reduce its stakes in others, such as telecom company OTE, and the Public Power Corporation. Regional airports and port authorities will also be privatized.

“Optimistic” forecasts conclude that Greece can raise $72 billion from such privatization. Benefit cuts, effective tax hikes and other measures would save about $33 billion in 2012-2015, bringing its budget deficit down to about 1 percent of GDP in 2015 from 15.6 percent in 2009.  “The government presented today a broad and specific mid-term fiscal plan up to 2015,” Finance Minister George Papaconstantinou explained to Reuters. “This shows the commitment and willingness to proceed with fiscal consolidation and proceed further with structural reforms.”

Unfortunately, the debt markets weren’t buying it — literally.  Borrowing premiums rose to record levels last Thursday, perhaps spooked by a comment from Werner Hoyer, one of Berlin’s deputy foreign ministers and a member of the junior coalition party Free Democrats (FDP), who said it would “not be a disaster” if Greece were forced to restructure its debt. “[If Greece’s creditors agreed that talks with Athens] would be helpful toward a restructuring of the debt, then of course this would be supported by us,” Hoyer was reported as saying. Adding to the uncertainty was the fact that a speech by Greek Prime minister George Papandreou earlier on Friday to address the debt crisis was seen as lacking in details. Papandreou promised to provide them after the Easter holiday. “The plan will be completed in the coming weeks and will be then submitted to parliament,” Papandreou told a cabinet meeting. “Today we are presenting the basic guidelines of a roadmap that will lead us from the Greece of crisis to the Greece of creativity,” he promised.

Yet government has seen disappointing revenues due in large part to an ongoing problem with tax evasion, and a deepening recession which threatens to undermine fiscal targets required by the EU and IMF. Further complicating efforts are Greek labor unions which have threatened to once again go on strike to protest austerity measures they see as futile. “It doesn’t matter how much family silver they sell, it won’t work,” said Nikos Kioutsoukis, general secretary of GSEE, the country’s largest private sector union. “After these announcements, we will take action.”

Mr. Kioutsoukis’s comments reflect the anger of those opposed to maintaining the present course, including the I Won’t Pay movement, whose “civil disobedience” translates into outright thuggery.  Activists, who many Greeks believe are spurred on, or hijacked by, left-wing political parties, have covered ticket machines on buses and trams with tape, even as thousands of people refuse to validate public transport tickets when they take the subway or the bus.  Doctors from state hospitals have blockaded pay counters to prevent patients from paying consultation fees.  A bus inspector hired to crack down on fare dodgers was shot. Thugs attacked Antonis Loverdos, the health minister, during a hospital visit in Athens, and James Watson, the 83-year-old Nobel Prize-winning geneticist, was attacked as he prepared to give a speech at the city’s university in Patras.

Social commentator Nikos Dimou explains the ease with which many Greeks engage in such behavior. “There is a general culture of lawlessness, starting from the most basic thing, tax evasion or tax avoidance, which is something that Greeks have been exercising since their state was created,” he said.

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  • Papanikos

    Stupid, no greek except for the politicians and businesspeople has been living profligate. Stop to repeat conservative slogans that may be useful in North America but not in Greece. Read something!.

    • kafir4life

      Everything in Greece must be free. Everyone in Greece must have a full, early retirement paid for by the government, FREE health care!! FREE transporation!!. FREE food!!! FREE!!! FREE!!!! FREEE!!!!!! and if it's not FREE, it's riot time!! FREE!!! FREE GREECE!! Nobody pays!! We must have raises!! Give us more!!! For FREE!!!!

      • Roula

        What kind of an idiot says such things? Nothing is FREE. Somebody has to pay. You want a raise? Where is the money suppose to come from for your raise? Greeks have to stop being tax evaders.

    • GKC

      ohpah to you Zorba, or is it Vinny?

  • welldoneson

    papanikos, generations of tax evasion and utterly stupid levels of gov't subsidy are
    bankrupting your country and you blame "politicians and business people?"
    The problem is obvious. You're a bunch of dumb a$$holes.

  • PhillipGaley

    "Greece is faced with three possible solutions. One, . . ."—ACTUALLY, MY FINE FEATHERED FRIEND, YOU LEFT OUT THE TWO PRIMARY THINGS: 1) even as our fine governor of Puerto Rico has done, Greece can lay-off 25% of the civil employees; and 2) Greece can issue non-inflationary coin / currency without corruption, making / allowing the individual to control his own destiny, hence the nation's future, . . .

    But in all, I would marvel to know just why you have gone to the effort of writing an article which would see things through the lens of the internat'l moneyed force, only, . . . and secondly, why style these people as "thugs" when and if, they're not stealing from "the man on the street'?

    While the administrator says that, Greece's problem is that people won't pay taxes, the people are saying that, taxes are the problem—sounds kind of Reaganesque?

    The ultimate goal of the administrators is, of course—as a funnel of provender—to point all means of production and human resources to the mouth of administrative government—an effort as old as Hammurabi; and, the people resist; so, . . .

  • pd restoration

    This is pretty messed up when you think about, its such a shame to think that other human beings do this to other human beings but I wonder if they know about

    paul davis restoration

  • Margaret

    Actually, it seems more like the Greek government created agency after agency demanded by the people. They, like the US Congress, continued to spend money they didn't have. Close down government agencies until Greece gets to a point where it's tax revenue equals its expense: a balanced budget. Then, if there is anything left to tax in Greece, bank the revenue until people get used to paying the tax to create the service. If revenue drops, close down the service. Now, about the US Congress and Obama….

  • Demetri

    I find the thought that the Greek people are living large at the expense of the EU, or other creditors laughable and displaying of considerable ignorance. Things were never even good to begin with there, even when the global economy was booming. The Greeks are a hard working people struggling to survive in a system that is engineered to stifle any type of innovation, and ecnomic creativity. While I am not saying that the Greeks are blameless in creating the monstrosity which is the government beaureacratic complex they are now being asphyxiated by, it is not true to say that all Greeks have benefited enormously from this and are "living large" Yes there may be some people who are able to abuse the system and retire early. and yes there may be some people who are able to abuse the system to receive "super" pension but this is a very small minority and most Greeks pension is below subsitence level. Greeks need to get rid of the civil servant mentality, and look to creating their own industries and more businesses. The governement needs to simplyfy the tax system to make it easier for people to create and run a business. As it is now, only an idiot would want to register a company in Greece as the amount of red tape involved is insane. The bottom line is that while they are in a mess, they have not been living large by any means. Indeed, Greece is the home of the 700 Generation. A whole generation from 25-35 years old who are unable to find work paying more than 700 EUR per month. So any talk of increasing highway tolls, and transit fares can bring no other response than the " I wont pay " movement. It is easy to look at the number as think that they are a bunch of freeloaders. Just looking a retirement age difference give no useful information without having visited the country, and getting to know the people. And as for tax evasion. Well lets put it this way, if you are working hard to build a business for years, and the government keeps saddling you with more and more red tape, and more and more taxes. Would you have a bad reaction? If you also saw the immense waste of the tax money due to government corruption wouldnt you snap? In this environment would not the sane course of action be to find a way hide as much of your profit from the tax man? Americans should think on that when paying their taxes. When you are sending in your tax return, think about the Loans that the Fed gave to a company owned by the wife of JP Morgan CEO for the purpose of making a bond investment, and that in the event of investment losses this loan would be completely forgiven. Still feel good about paying your taxes?

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