Purification rituals

By Nikos Xydakis

The collection of higher-than-expected state revenues (which exceeded the target set for the seven-month period by 555 million euros) from income taxes and the terrible introduction of the new single property tax, better known by its acronym ENFIA, which prompted an outcry after erroneous data used to calculate it resulted in disproportionate levies for thousands of homeowners, both speak volumes about the recklessness of senior officials at the helm of Greece’s Finance Ministry.

In addition, both examples regrettably point to an inexcusable degree of insensitivity and ignorance among ruling officials about the dismal state of Greek society and the economy.

The unprecedented taxes that the conservative-led government has imposed on taxpayers, businesspeople, professionals and salaried workers are being paid with money that they don’t have to spare. Their contributions are made at the expense of liquidity, the vitality of businesses, already scant demand and the national economy in general.

As the deadly deflation deepens, as the economy remains locked in recession for a sixth consecutive year, and as unemployment hovers at a stubbornly high rate, it simply makes no sense to drain the economy in advance. The Greek economy is dying for liquidity and demand-side measures while people are desperate for jobs.

The premier and his senior ministers must put their spreadsheets aside and instead take a drive around the country as soon as possible. They would be advised to have a chat with some of the producers and manufacturers out there. They will most likely tell them that at the end of each month they struggle to pay their taxes and meet their financial obligations to the state. At the end of each month, they wonder whether they have any material and mental capital left to carry on with their businesses.

What the government’s economy planners are doing in draining the real economy and households is a mistake of historic proportions. The policy must be reversed now, before every last business has been brought to its knees. The need is even greater given the international environment: The countries of the euro area are flirting with recession and deflation. Europe is paying a heavy price for its geopolitical role in Ukraine. Greece can no longer stand the purification rituals orchestrated by Brussels and Berlin.