German Chancellor Angela Merkel’s remarks on the performance of the Greek economy during her official visit to Athens on Thursday ignored a very significant fact that is stifling the country’s prospects.
As every Greek businessman and worker will tell you, unless the leftist-led government starts taking some serious steps to reduce the tax rates and social security contributions that have decimated the middle class, the country will never manage to get on a steady path of growth.
It is unfortunate that Berlin either fails to grasp the full significance of this, or it does not have a clear idea of what the situation is really like.
Unless Greece brings down its primary budget surplus targets – which will thereby lead to lower tax rates – the national economy will continue to underperform and remain stagnant.
In fact, matters will only take a turn for the worse if the government, with elections in mind, continues to unravel and roll back reforms.