Encouragement to consensus
Perhaps the Troika could «encourage» the political parties to reach a consensus. If all MPs were paid the national minimum wage until the deficit was reduced to zero and then double national minimum wage until the debt was reduced to zero it might concentrate their minds. Since most decisions are really taken by ministers they should take more responsibility so give every serving minister and every MP who was a minister in a preceding administration no wage until the deficit is zero and then minimum national wage until debt is zero.
Possibly apply a similar rule to the pensions of all retired MPs since they had a hand in the problem.
How could the Troika impose such strictures? Make it a condition of all future instalments on the bail out. Accept it and Greece will survive. Reject it and everyone will know who is responsible for Greece going to the wall. I am sure their well-stuffed «reserve» accounts would see them through.
Warwick Gibbons, Crete
LAOS leader ponders party exiting Parliament
At last. someone with guts. Well done LAOS.
That is it as far as I am concerned. There is no hope left for the Greek politicians; they are going to the dogs. Good luck to the rest of us.
Is it the fall of the second Constantinople? Or should Greece restore the royals yet again, because we have seen no guts from the presidents of Greece so far. What is Papoulias doing? Why is he there? The Constitution has been abused again and again equally by our governments and people. The president has no added value when the politicians are in disarray. Bring a powerful and neutral authority! If this is called a King so be it. Enough with weaklings. Do we really want another Junta? of course not, so what on earth are our inexperienced politicians are trying to achieve. You can?t handle it? Then get out!
Alex Charalambous, France
IKA rates vs minimum rate
If the Greek government wants to do a credible job in advancing growth and job creation in the economy they should start by tackling the confiscatory and regressive IKA rates they charge.
From my understanding the employee pays 20 percent and the employer 30 percent; a total of 50 percent!
On the premise that the above is correct then it is not surprising that the Greek nation has made tax avoidance a national hobby. Paying 50 percent of one’s earning for what is definitely a substandard quality product — when you go to IKA hospitals it seems you have to incentivise the doctors with «fakelakia» to do the job they are paid to do! — is not prudent. Margaret Thatcher proved to the world that when you reduce tax rates to a reasonable level you collect more revenue.
As much as business would like to see corporate tax down to 15 percent, at least the present rate applies on realized profit rather than taxing expenditure, which is what the IKA rate is doing. It is a direct tax on employment and a major disincentive to any business. It is easier to employ illegal immigrants from Albania and Pakistan and pay no IKA.
Apart from the debilitating mindset it has instilled in the Greek nation for tax avoidance, this confiscatory IKA rate is definitely a disincentive to employers to create «official» jobs. Taking the UK NIC rates of approximately 20 percent (above minimum wage), by both contributors, as an example, the Greek government should rethink its pension and health service objectives and reduce the IKA rate to max. 20 percent by both contributors.
Reducing the minimum wage for young people to below 600 euros a month is not the answer. It is an insidious and hypocritical machination that will not help create jobs, it will only build up resentment and cause strife in society. Leave the youth alone and instead target those who do not pay their fair share of tax. Make the overpaid and overprotected tax bureaucrats do their job properly.
Emmanuel Mantheakis, Sultanate of Oman
Greek tax evasion
A less sophisticated (but probably more effective!) way to attack the tax evasion problem would be the following:
The government plans/arranges that, one day, Greek TV channels report all day long how 10-20 well-known ?mangas? from politics, bureaucracy, business, etc. are led away in handcuffs, accused of enormous tax evasion. The positive energy reverberating the entire society would come close to the level when Greece won the European soccer championship.
In the evening of that day, the government announces that at least a thousand intelligent but unemployed university graduates have been trained to make tax evaluation interviews with people who are deemed to have high income and/or property but paid hardly any taxes. That they will make one such interview per day, which means that one thousand ?mangas? would face a moment of truth every day (or about 100,000 within three months). The ?mangas? would be informed that if they refuse to provide information or if they provide false/incomplete information, that would be a criminal offense and could lead to immediate arrest. The small shop owners and businessmen or the taxi drivers, who presently almost force a customer to accept a receipt, would not have to worry because they definitely don?t belong to those 100,000.
At the same time, the government announces a solution for people who want to avoid stiff penalties and/or jail (but still pay past taxes which were evaded): they are given a 30-day period to «come clean» with their tax situation if they take the initiative to lay open their financial situation in full.
To wit: Silvio Berlusconi, after having seen DSK in handcuffs, will undoubtedly behave very well the next time he stays at a NYC hotel.
Klaus Kastner, Austria
It’s emergency time
Perhaps it is time to bring back a king with the authority to knock heads together. That is what monarchs were for in the first place. Somebody has to save Greece from itself. Otherwise, consider the consequences of a total financial breakdown and the possible fragmentation of the country into mini-states. I love Greece and do not want that to happen.
Save yourselves from the dark!
Mr Simitis please explain?
Former Greek PM Costas Simitis (1996-2004) got Greece into the eurozone in 2001. On what criteria did he do this when clearly Greece did not have the appropriate structural reforms in place. Mr Simitis has cleverly managed to stay under the radar on this issue.
There are 27 EU members of which 17 are in the eurozone, Greece is by far the weakest link. Facing financial ruin in 2010, Greece begged for cash. The IMF and EU lent Athens 110 billion euros, Greece burned through it. One year later, the country is still facing ruin and still begging for cash. For the EU’s central powers, Germany and France, there’s no good way out of this.
(a) If the EU puts more money on the line with another Greek loan, taxpayers will revolt.
(b) If Greece restructures its debt and pays its lenders 50 cents on the dollar, French and German banks with Greek loans on their books will take a massive hit.
(c) If Greece drops the euro to restructure on its own currency all hell will breaks loose in the EU.
The most likely scenario today is, another loan for Greece. Germany and France have asked Greece to sell government property to pay back lenders, Europe?s political elites don’t trust the Greeks, and they want to ensure their electorates that the money will be repaid, says Desmond Lachman, a resident fellow at the American Enterprise Institute who has worked for the IMF and served as the chief emerging market economic strategist at Salomon Smith Barney. «Europe is willing to put taxpayer money at risk because a default could trigger a banking crisis in in Europe”
A dramatic Greek default will trigger higher interest rates in Ireland and Portugal. If more countries join Greece on the help list, that would raise the overall price of bailing out the periphery of Europe. The end game according to Desmond Lachman is that Greece has to leave the eurozone, and this is the prediction he makes today in the Financial Times.
Success fee for tax officers
In order to increase tax revenue it would be advisable to provide financial incentives for tax authorities to catch tax evaders.
Until now tax officers were used to receiving the notorious «fakelakia,» the content of which has become a part of the income of these officers on which they could rely on a more or less regular basis.
Therefore it would be fair to give these folks a certain percentage of the sum they obtain from their clients. As an example: if tax officer X, instead of taking from Mr Y a bribe of 1,000, taxes him correctly he should get a share of the same amount as a success fee.
This could open a new perspective on the issue of business ethics in the context of tax evasion.
Nik Luhmann, Vienna
Greek diaspora can help — can Greece accept it?
I have been involved with Greek diaspora affairs in a number of capacities for over 20 years and it pains me to see Greece going through this current crisis. I will not venture an opinion on who or what is to blame, there has been too much said about that in your and other newspapers.
What I can say with conviction is that there is the talent, skill, knowledge, experience, know-how and most importantly the will amongst our compatriots in the diaspora to assist in every way possible for Greece to overcome the enormous challenges that it faces. What seems to be lacking is the ability, capacity and will of the Greek state to engage with the diaspora to harness this resource. Does the Greek state in fact recognise the diaspora as a resource? Does it know what it wants from the diaspora? Can the Greek state understand the diaspora and how it can assist? More importantly does it want to do so?
I have yet to see any evidence of a vision from the Greek state for the diaspora. A vision that is accompanied by a clear policy, a strategic framework, an implementable plan and a communications strategy that conveys this and inspires and motivates the diaspora. Hollow populist statements, lip-service to principles that have been rendered meaningless through overuse without real implementation, and appeals to a patriotism that is undermined every time it is referred to is what we get from Greece and its politicians and officials of every ideological persuasion that simply confirms that ideals and visions are so sadly lacking at a time when they are so desperately needed.
We in the diaspora continue to do the work that our forefathers bequeathed to us, to protect and promote Hellenism amongst Hellenes and in the societies that we live in. We do so with passion and conviction, and we do so with the humility that comes from knowing that we are a link in a chain that stretches so far behind and ahead of us that it gives us the strength and purpose to continue whatever the challenges.
Harry Gouvelis, Pretoria
Restructuring is a bad answer
I have said in previous letters that Greece’s way out of this fiscal mess is to restructure its debt. However, reality has taken over and restructuring is not the answer because it is the Greeks themselves who would be hurt the most, not foreign creditors. Foreign banks, mostly German and French, that hold Greek debt would probably be shielded somewhat by a restructuring because their governments might help prop them up. But what about Greek banks, which hold a large amount of the Greek government’s debt? Who would help prop them up? Not the insolvent Greek government, nor the ECB, which has already declared it so. The Greek economy might take a serious plunge with a restructuring. Considering that quantitative easing is not an option for a eurozone country like Greece, that means that Greece’s best answer is to continue to shrink itself, from a leaner, more efficient public sector, significant sales of state assets, including crown jewels like OTE and OPAP, as well as busts like OSE, and the shrinking of public pensions and streamlining healthcare. Moving bureaucrats out of the way and allowing business to be more competitive will be a huge help as well.
Peter Kates, USA
Remove the corrupt
I review your on-line English edition with great regularity and interest. As such, I thought it might be helpful and prudent to inform your readers that I can see from all the way over here in Canada that the Greek people need to rise up and remove their corrupt Government (by force if necessary) and withdraw from the EU. Failure to do so may result in Greek taxes being paid directly to the banks which, in essence, would completely destroy Greek sovereignty. Once this happens, any remaining wealth in Greece will be totally plundered by the bankers. Your beautiful islands and properties will simply be taken for pennies on the dollar.
Good luck to you all — you will need it.
Spencer Spratley, Ontario