On tax evasion, supply-side economics, eurobonds, Germany, cemeteries
Increasing number of citizens report tax evaders
It is like a breath of fresh air to hear about Greek citizens doing their bit to address the problem of tax evasion. One can only surmise as to how much more manageable our fiscal problems would be had evaders not evaded to begin with!
Dimitri Bertson
wikigreeks.org
To the Germans
What an extraordinary piece of literature confirming a trait of the present-day Greek mentality, which is: point the finger at others; put yourself in the position of the victim.
Yes, one can nowadays criticize the actions of the German government (and, above all, the reaction of the German people) with regard to the Greek problem. But criticize for what?
The most valid criticism of Germany would be that its government was unable to show professional leadership at the beginning of this crisis. Had they been able to do that, they would have said at the latest by 2009: ?Here is a Euroland country which has foreign payment problems. The country should sit down with its creditors to work out alternatives. If we can help at the end, we will do so within reason.? Losses would have had to be taken by those who entered risk and who collected profits on assuming that risk. That is how capitalism works.
Not to have done that is the reason why the Greek crisis has been blown out of proportion and has now become a crisis of Euroland. That, indeed, is not Greece?s fault. It is the fault of the EU elites, particularly Germany?s. They should have known better!
But for Greece to play the role of the helpless victim at the will of foreign powers; a nation which can no longer do anything on its own to determine its future? That, my dear Greek friends, is a joke!
I am Austrian; my wife is Greek; we have an apartment there. Whenever I am in Greece, I enjoy a standard of living as well as a cost of living (and I observe a luxurious standard of living of the well-to-do Greeks) which I cannot compare to my/our standard of living and cost of living in Austria. The amount of wealth which the upper class of Greeks displays in Greece alone (not to mention the wealth which they stash away offshore) is absolutely unimaginable in Central European countries.
At the same time, I see the standard of living of the not-so-well-to-do Greeks, which has become a horror. I see brilliant university graduates to whom society cannot offer employment. I see ?hard working and clean living? people who don?t have a perspective for their future.
So, please, if you want to blame someone, blame first your own compatriots. If you want to ask someone to understand your difficult situation, ask your wealthy compatriots.
It is absolutely ridiculous that a country whose upper class is among the richest in the entire world (and whose wealth does not necessarily come from ?hard work and clean living?) would emotionally blame other countries whose much more modest and more balanced wealth is the result of ?hard work and clean living.?
The New York Times published earlier this year a front-page article about a successful Greek-American entrepreneur who, in his advanced age, wanted to use part of his wealth to do some good for his home country (http://www.nytimes.com/2011/01/30/business/30greek.html?hpw). Read this article and be ashamed of yourselves before you criticize others!
How can you expect the citizens of other countries to share in your burden if you yourselves are not prepared to share in the burden of your own compatriots? You request greater EU solidarity; greater understanding that we are all one continent.
Please don?t do that before you have demanded of your own compatriots a greater commitment to solidarity amongst yourselves as well as an understanding that you are all one nation and that everyone has to make a contribution to one?s nation.
I say this as an admirer of Greece, Greeks and Greek culture for almost four decades. But just like I was often required as a parent to be ?hard? on my children so that they would not be spoiled but instead be prepared for the challenges of life, I think you should grow up and assume responsibility. You cannot think of yourselves as the vulnerable children of the strong Europe. You have to think of yourselves as the cradle of European civilization and you have to act accordingly.
Sometimes it helps a society to remember what their ancestors might have said about their progress. Your Greek ancestors would undoubtedly be embarrassed to see how you presently behave. Think of your ancestors. Consider what advice they would give you if they could give you advice today. But even as a non-Greek I am rather sure that they would advise you to change your behavior from one day to the next!
Jack Welch, the famous American entrepreneur, concluded one of his books with the admonition: ?Don?t ever allow yourself to feel like a victim!? Your ancestors were of much greater prominence than Jack Welch. Just think what they would say to you today.
I have lived in eight countries and I have never met a people as proud as Greeks are. Forget your pride about the past. The past was none of your own doing. It is the present and the future which is your own doing and make every effort to be proud of that!
Klaus Kastner
Austria
To the Germans
I regard myself as a true Grecophile (as well as Hellenophile) after over 55 years of traveling and living in Greece. I read the English-language edition of Kathimerini almost daily and of course have been avidly following Greece?s current economic crisis in the articles and commentary not only in Kathimerini but in American newspapers. And I just wanted to say that I think your latest commentary is one of the most sensible and sensitive pieces I have read through all this. That?s all. I just wanted to congratulate you for your thoughtful commentary. It should be published and read in every language throughout the EU.
John Bowman
Northampton Mass. USA
A rising tide doesn?t trickle down
?A rising tide lifts all boats? is attributed to John F. Kennedy and an aphorism used by the Clinton administration and has nothing to do with supply-side economics. I once heard Jesse Jackon, Sr. use the phrase when arguing for more protection and jobs for the lower middle class. It is almost the exact opposite of the trickle-down economics associated with the supply-siders and Ronald Reagan.
Joan Donahue
Let?s sink together?
Dear Nikos Konstandaras,
I don?t agree with the bottom line of your article: We have to stick together.
The problem is we in Europe are in a process right now we never should have started.
A process that started in Europe. Not in Germany or in any other country. And now we have found out our politicians made a big mistake when introducing the euro the way they did: Having Greece in. And not having two euros. The result is this crisis.
Instead of stopping this process and rebooting it in the right way, our politicians are trying to mitigate the (and their) damage of this crisis. In many countries in the north of Europe many voters do want to stop this process now. Because they don?t believe anymore their damage can and will be mitigated.
Nor were they or are they asked to support this process.
For instance, in Holland today more than 50 percent of the voters want to have Greece out of the euro.
Sorry for that, but they don?t want to sink together!
So, we better reboot the process.
And Greece in its own way.
Hans van der Schaaf
Greeks, Germans and Berlusconi
Greeks seem currently very concerned with Germany and the attitude of its citizens, media and politicians. From traditional philhellenism to Hellenophobia, a seemingly sudden shift. Don?t worry, philhellenism will win and Greece will in a distant future again be the darling of educated Germans.
But Greece?s fate is currently not in the hands of hyperboreans. It is being decided in Rome and, to a lesser degree, in Madrid. Only if Italy and Spain master their public debt problem will the ECB be able to continue buying Greek bonds (and Irish and Portuguese bonds as well).
If Berlusconi fails, as usual, the ECB will continue to buy Italian rather than Greek bonds. Why? Because if Italy goes bankrupt it will not be able to pay its share of the European Stability Facility etc. Without Italy?s contribution, the third largest, all eurozone efforts to salvage Greece and the other ?small? debtors will collapse. And then, sayonara Greece.
Incidentally, this warning was expressed by Brussels Commissioner Guenther Oettinger, a German…
T.C. Sempronius
Vienna
Eurobonds
?Nothing is as inevitable as a mistake whose time has come!?
EU politicians are called upon to prove that the above Tussman?s Law (taken from Murphy?s Law) can be proven false for once!
It seems inevitable that EU politicians are about to decide either on the issuance of Eurobonds or on a gigantic bond repurchase program on the part of the ECB. Both measures fall into the category of ?kicking the can down the road.? The time, indeed, seems to have come for this mistake. It is up to EU politicians to make it evitable.
Eurobonds would not only lower the interest expense for problem countries, they would also put the full faith and credit of every euro taxpayer behind their debt. As a result, a central authority would need to determine the amount of Eurobonds which an individual government can issue. What will EU politicians do when an individual government needs more cash but the central authority does not permit the issuance of new Eurobonds? They would be in the same situation as they are now.
Repurchasing bonds of problem countries is not the same as the monetary easing on the part of the Fed. The Fed is just printing money when it buys Treasuries but it does not incur credit risk. The ECB is doing both (and it is the credit risk which will bankrupt the ECB and not the printing of money).
Common sense would suggest the following: When things get as bad as they are now in Euroland, one has to cut one?s losses, turn the clock back to zero hours and start all over again, this time not making the same mistakes as the first time around. How could this work in practice?
Require the current investors (in whatever legal manner one can do that; in the extreme case allow default) to accept new 30-year bonds as prepayment for current bonds with interest on the new bonds payable at maturity. Then, make a secondary market for these bonds. This would economically be equivalent to a temporary 50% haircut (at least for the next 30 years). Those bonds would probably trade significantly below 50% for the next number of years. Whether they ever gain value again depends on whether the governments make the same mistakes the second time around, or not. To supervise that mistakes are not repeated would be the responsibility of EU politicians.
Require the investors to mark these bonds to market. New legislation would have to allow the investors to make these write-downs of their bonds over several years (no dividend payment during this time). Investors who cannot absorb these write-downs even during a 10-year period should be liquidated in an orderly fashion.
The worldwide financial system would break down in chaos? That should be doubted because all the financial system wants is transparency, and transparency it would get. The governments would quickly make the same mistakes again as they made in Round 1? Possibly, but not certainly. If they did not, these bonds would regain value again until their maturity. They would probably never return to 100% but if they returned to 60-75%, it would already be a master stroke.
Here is one irrefutable argument why one simply must discontinue the policies of the last two years: Taking the example of Greece, 65 billion euros have so far been disbursed under the rescue plan; allegedly 50 billion euros (or more) have been invested in Greek bonds by the ECB; and the ECB has lent roughly 100 billion euros to the Greek banking sector. That makes a total of roughly 215 billion euros. Just imagine what would have happened if only half of that amount, say roughly 100 billion euros, had been made available for private sector investments in Greece instead of bailing out the investors?
EU politicians have to attack the problems at the source and not the symptoms. If they want to bail out investors, they should do so directly: Force them to take losses; replenish their equity if this is necessary and later sell this equity in the market, hopefully at a profit (example of Citigroup).
If they want to help the problem countries, they should use the money to stimulate their private sector economies.
But stop throwing good money after bad!
Klaus Kastner
Austria
Supply-side economics?
In order to get Greece back on track many things have to be changed.
But implementing a supply-sided economy in Greece as a cure should not be advised.
Because Greece has (only) a supply-sided economy!
And state companies can and do only deliver only this kind of products.
As do many private companies.
For me this is an important cause of the bad output of Greece?s economy today.
Instead of that, a demand-driven economy should be today?s focus: What does the market / this client or guest want? And of which quality? Things like that.
In Greece most companies are not interested in this attitude.
Quality? What do you mean?
?I have been doing this job now for 36 years, and you want to tell me what I have to do??
Some supplier in your tourist industry told me this when complaining he had so little demand.
In Holland companies do make mistakes. Most of them are not-wanted or not-anticipated.
But then something happens. And you do complain. Today by the internet.
They will reply that they are grateful you did inform them about this complaint.
And they will find you an answer to it. Or help you to mitigate the direct effects.
They learn this way. And this way become more competitive.
I won?t publish here my lists of complaints concerning the quality of services I experienced in Greece.
Most times companies here don?t even reply.
And their clients? They just expect them to do so.
So I think Greece better implement a demand-driven attitude and economy concerning its products and services.
In the private and in the state sector.
But first of all in the attitude of their clients!
Hans van der Schaaf
Peace for the living
A lack of cemeteries in Athens means that after three years a relative has to witness the exhumation of their loved one. The bones of the dead are broken and put in a contanier and all this because there isn?t enough cemetries… maybe the lawmakers need to find a solution to that macabre situation first!
Sarah Gilhespie
