Categories: Need to know

The reality of Greece’s crisis: grinding poverty

Meanwhile, rich tax cheats aren’t being punished

by macleans.ca on Wednesday, July 20, 2011 10:08am - 2 Comments

Any notion that the outcome of Greece’s fiscal mess will be a bit of belt-tightening in the country’s profligate public sector is nonsense. In fact, the brunt of the austerity push now being imposed by the country’s government, in a struggle to avoid defaulting on debt, will be felt by the newly poor. Last year, the number of Greeks without jobs soared to 14.8 percent, and is expected to climb over 18 per cent by the end of this year. Unemployment benefits are available for only a year at a paltry monthly rate of less than €500. After that, there’s almost no social assistance. Homelessness is rising steeply in Athens. Greece hasn’t experienced anything like it since 1961. The country’s economy rests largely on tourist attractions and agricultural products, so the chances of a quick bounce back are slim. And the fiscal problem can be traced back largely to widespread tax cheating by the rich—ordinary Greeks can’t dodge taxes easily since automatic deductions from their pay cheques are the norm. The small wealthy class, however, illegally avoids an estimated €40 billion in tax each year. They aren’t afraid of being caught. Panos Kazakos, an Athens-based professor of politics, says: “I have never seen a single person put in jail for tax evasion.”

Der Spiegel

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  • TonyAdams

    The problem is that Western World is bankrupt, economic crisis not causing poverty, it is just reflecting that there is no more money to borrow from Chinese peasants. 

    And now Western World has to pay for massive debt we have accumulated over the past few decades.

    ————-

    “Hold on for just a New York minute now and consider the powerfully serious message the bond market sent ….. 
    Here are the facts: The yield on Greek sovereign debt is now at record highs for the euro era. Last week’s state-managed bond auction in Italy almost failed. And, while few seem to have noticed, the overnight repurchase market — for short-term, secured, corporate debt obligations — nearly seized up amid what Combs described as “an almost panicky scramble” for less- risky paper.
    http://www.bloomberg.com/news/2011-07-19/congress-bickers-as-bond-markets-brace-for-total-panic-william-d-cohan.html

    NY Times: 
    THERE is no shortage of explanations for the economy’s maddening inability to leave behind the Great Recession and start adding large numbers of jobs: The deficit is too big. The stimulus was flawed. China is overtaking us. Businesses are overregulated. Wall Street is underregulated ….. We are living through a tremendous bust. It isn’t simply a housing bust. It’s a fizzling of the great consumer bubble that was decades in the making ….. Now, the economic version of the law of gravity is reasserting itself. We are feeling the deferred pain from 25 years of excess, as people try to rebuild their depleted savings. This pattern is a classic one. 
    http://www.nytimes.com/2011/07/17/sunday-review/17economic.html?_r=2

    NPR: 
    “The latest Europe debt-crisis action is pretty substantive, on a couple fronts. I’ll get to that in a minute, but first it’s worth pausing to look at a graphic from a new BIS report (PDF).
    The graph shows lending between banks in different countries. It looks like a web made by an insane spider, which is precisely the point: Banks in the U.S. and Europe are connected by a dense web of interbank lending.”http://www.npr.org/blogs/money/2011/07/13/137764054/why-europes-crisis-matters-for-the-u-s-in-1-graph?sc=tw&cc=share

  • Anonymous

    The ‘rich’ have long since left the country, and only return for brief vacations on those beaches.

    The people causing the problem are upper middle class….the doctors and lawyers etc who claim to be only making 30K a year, and yet have swimming pools.

    Evading taxes is a national sport in Greece.

    The mess is the result of libertarianism,  refusing to modernize,  and poor political leadership that allowed it to happen.

    “there is no such thing as society. There are individual men and women, and there are families.”

    Yes indeedy….and Greece is what you get when there is no ‘society’ 

    “I’m alright Jack, so to hell with you”

    Greeks are making it worse with constant rioting….nobody wants to visit or invest there with that going on, and the extra policing is costing enormous amounts of  money as well

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