A new chapter of a hell 0f austerity is ahead for Greeks as the International Monetary Fund (IMF) recommends new austerity measures. Even if IMF’s point of view is that Greece has reached its limit in raising taxes, the proposed spending cuts that it will translate into salaries and pensions decreases and lay-offs will have the same impact: a further lowering of people’s incomes.
In its 165-page report “Greece’s Progress 2011” the IMF stresses that Greece should focus anew on its austerity programme and apply long-term spending cuts.
“The country had reached the limit of what it could lead to tax increases. The country’s structural reforms have lagged far behind the overall expectations. The country has not fundamentally changed its business practices, so it was still in a recession.”
Speaking to reporters, IMF’s head of delegation in Greece, Poul Thomsen, admitted that the recipe of “taxes over taxes” has failed.
“I think one of the things we have seen in 2011 is that we have reached the limit of what can be achieved through increasing taxes.”
At the side of IMF’s programme to Greece, Thomsen said that it is not clear, the IMF would aprticipate in the second bailout for Greece.
IMF’s report findings in key words:
• Additional austerity measures worth €29 billion! €16 billion for 2011-12 and additional €13 billion for 2013-14!
• IMF estimates that recession will be 6% and the budget deficit will reach 10% in 2011.
• It sees a 5% primary surplus of GDP from 2014 with the ‘help’ of 29 billion EUR measures.
The report outlines where the money will come from in 2011-2012:
– additional revenues €2 billion for 2011 and another …additional €8 billion for 2012 among through
•cuts in tax-exemptions
•emergency property tax (4 billion EURo until end 2012) [this measure missed its targets in 2011 anyway]
• cuts in pension spendings ( 2 billion EUR)
The IMF’s technocrats estimate unemployment will be 17% in 2011 and 19% in 2012. [ here the unemployed self-employees and business owners are not included]. Further they advise the lowering of the lowest salary below 751 euro per month.
The IMF admits that “the agreement of July 21 could not have been operational.” The public debt is expected to peak at 187% of GDP in 2013 and decrease to 152% by 2020. The purely external debt is expected to peak at 128% of GDP in 2012 and drop to 96% by 2020.
PS Missing the targets after four years of recession and 19 months of IMF programme has two sides.
Partly the blame is on Greek governments delays of implementing some measures like get rid of superfluous personnel, cuts civil servants and state-run enterprises personnel wages and pensions, proceed to privatizations.
Partly the blame is on IMF because its technocrats in Athens prefer to scratch their arms, turn a blind eye, have a good time and make wrong calculation on their paper sheets instead of dealing with real facts, real societies and real people (incl the state officials). But where did the IMF applied correct policies? Show me one, just one example.
IMFies Go Home! and take with you all the Greek politicians!
Further Reading:
IMF’s report in PDF: Greece: Fifth Review Under the Stand-By Arrangement, Rephasing and Request for Waivers of Nonobservance of Performance Criteria; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Greece.
Associated Press: IMF: Greece can’t tax its people any further
Bloomberg: Greece’s structual reforms ‘behind schedule’, says IMF
Proto Thema: IMF demands new hazard measures (in Greek)
Speaking to reporters, IMF’s head of delegation in Greece, Poul Thomsen, admitted that the recipe of “taxes over taxes” has failed.
“I think one of the things we have seen in 2011 is that we have reached the limit of what can be achieved through increasing taxes.”
REALLY EINSTEIN????????????? WOW!!!.. Now THATS a suprise! NOT!!.. Sometimes I really wonder what planet these politicians are from. They make laws and changed over and over again, which all experts (and normal people) are against knowing it will fail… It then fails and then it comes as a shock to them.. Really wondering what goes on in their minds..
Its been proven time and time again, that raising taxes ect do NOT help getting a countries economy back but do the exact other way around, bring it even further down. And still they do it.. Argh!!..
Taxes or austerity.. Whats the difference? Same thing, different name..
Tina, Thomsen is not a politician, just a clerk living in a bubble – the usual protection shield to avoid real life challenges.
And he is Danish, isnt he?? Sounds like it from his name…
Im ashamed!!..
yes, he is.
Why should YOU be ashamed? Just because he has the same nationality? 😕 Only when you could change his actions and you didn’t you should be… or if he was your son… 😀
If the government would shoot all pensioners the IMF would complain about the high costs for the bullets.
None of these bastards will ever tell about that if a state needs to borrow money something is totally wrong and when they say “no higher taxes” they mean the rich creeps they wanna see prosper from Chinese wages in Greece. Just remember the first “measures” in 2010: These first 5 billions were exactly that 5 billions the state missed because they lowered the taxes for big biz from 40% down to 20%. Beside lending “money” – without that no profit for the banks, that is in fact the strongest Mafia that washes money they get from ECB with 1% interest to capitalize from states 5% and from the people up to 15% – Import/Export is the capitalist dogma of their death machine but as a basis for all societies it will fail. First a society must get able to feed itself, anything else, be it world trade or tourism, society can take as surplus but not as basis. (If you try that, first Greece will become an ugly destructive Disneyland, followed by total disaster when it gets out-fashioned – the latter could happen fast as the times are running idiots)
As Greece is a country full of resources and with the most intelligent proletariat worldwide – means just normal people can provide analysis Karl Marx would have been proud of – there must be a possibility to try something between an anarchist Cuba, oil-rich Venezuela and libertarian Salavador Allende. That would mean to try to vote the shit out starting with the 37% leftist voters and the 30% non-voters… kick out the banks and get rid of the money-machine.
Any government has two major ways to balance its budget. On the incoming side with taxes and on the outgoing side with spending.
Since in Greece there is a clear problem on the incoming side with an inefficient taxcollecting agency and a population that likes to evade taxes it has to use the tool of cut spendings to achieve a balanced budget.
Unfortunately this way the lower income people and social problems are hit the most and will inflict more pain on the population.
Greece needs desperately strong and brave prosecution lawyers and tax police officers who are honest and go after the big tax evaders to improve the incomimg side! Maybe this task should also be put into the hands of foreigners but that approach had failed already once before while Greece was under Bavarian rule in the 19th century.
Greece needs a major mentality restructuring, I believe. If still corruption & tax evasion are on at these times, there is nothing lese left to say.
😛