Breaking the cycle of backwardness

Yesterday’s allegations by the Panhellenic Association of Chemical Engineers that the booming illegal fuel trade costs 2 billion euros per year in lost tax revenues should set off alarms for the government, responsible state officials and political parties. Collecting just half of those lost public revenues would solve Greece’s fiscal woes. The illegal fuel trade is another manifestation of a fundamental and multifaceted economic problem in this country. The signs are familiar: revenues that do not reach the state coffers, arms procurements that do not suit Greece’s security needs, and public projects that do not serve any obvious social purpose and merely offer an opportunity for bribes and kickbacks. These chronic plights result in more than just the squandering of public wealth – although the money could have been used to remedy Greece’s fiscal crisis and bolster its capacity for economic growth. The current predicament mainly perpetuates the black market economy and feeds into a regressive mentality that does more harm to Greece’s future than the substantial economic damage, per se. A blatant case in point of Greece’s backwardness is the state’s watchdog imposing fines of 4.5 million euros on petrol stations in Athens and Thessaloniki for illegal trade in fuel when the total loss in tax revenues stands at 2 billion euros. Here are more examples: 40 percent of professional drivers are using cheaper heating oil instead of diesel to fuel their vehicles, and 45 percent of the fuel distributed in the regions is adulterated. It is also a sign of backwardness that 120,000 cars are damaged every year because their engines are powered by diluted fuel. It is unforgivable that in a member state of the European Union entire professional sectors or businesspeople resort to Third World practices to ensure profits and well-being. But such an economy, despite any positive macroeconomic indicators it may occasionally report, will not be able to survive in a globalized, highly competitive environment. The government must break the vicious circle of backwardness ruining the long-term prospects for the Greek economy.

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