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Value Added Tax on fire: Crazy hikes in food & tourism

More than 40,000 food items are been sold with a poisonous 10% Value Added Tax hike as of today and expect to burden the average Greek household with at least 55 euro per month.Beef, coffee, tea, cocoa, spices, sugar, oils – except olive oil, ice-creams, chocolates, but also condoms and tampons, some articles for people with disabilities, transport, taxi… just pick up an item and name it cost 10% more as of Monday 20th July 2015.

The absurd VAT hikes amid recession and economic crisis come into effect with an express implementation of  Greece’s creditors “prior actions” that the coalition government and three opposition parties voted in favor on last Wednesday. In fact, the Vat hikes for 13% to 23% were supposed to go into effect already on Friday, that is less than 48 hours after the voting. But the Greek Finance Ministry decided to give it a two-day extension to allow the market to adjust.

crazy-cartoon

Especially in food items the VAT hikes cause ridiculous examples as in the past, when the Troika insisting on VAT hikes:

Beef 23% but chicken, pork 13%

1 kilo of minced meat: 13% if consists of 60% pork and 40% of beef. But 23% if it consists of 60% beef & 40% pork.

1 scewer of souvlaki with pork: 13%. But if pepper & tomatoes are added 23% despite the fact that the veggies run on 13%.

The same is valid for burgers of pork and chicken or turkey.

Chicken has 13% but it goes up to 23% if it is stuffed with feta cheese or is sold in form of pre-made schnitzel with breaded crust cover.

Plain past is 13% but stuffed pasta like tortellini is 23%

Bread and bread products: 13% if plain, but 23% if they contain sesame cover, or stuffed with raisins and cheese.

The general VAT idea for food items is: 13% for staple food: fruits, vegetables, flours, olive oil, dairy products (milk, yoghurt), salt, fish, bread, water. But 23% for mainly imported goods like beef, and food processed products.

Other VAT hikes to 23% include:

transport tickets (as of autumn 2015) and taxi (as of July 20th), restaurants, foreign language schools.

Minimum taxi fare charge is as of today: €3.44 from €3.20 until yesterday Sunday. Taxi fares from and to Airports will rise accordingly.

Hotel accommodation to rise from 6.5% to 13% as of October 2015.

The 30% taxation reduction for the islands will be scrapped as of autumn, but there will be a new taxation scheme for certain islands categories whether with high tourism or not.

VAT at 13% remains also for utility bills and fuel.

VAT for medicines and vaccines, newspapers, books and theater tickets is now lower from 6.5% down to 6%

The total annual extra burden for the households is expected to be 650 million euro.

Conclusion: Has now Greece achieved the much praised competitiveness with the VAT hikes? Of course, not. First of all, the VAT hikes have a pure revenues increasing target. They will hit the poor as indirect taxes increase is an unjust measure. The 55 euro more that they will be called to pay each and every month is money they simply do not have.

And second, the hikes in restaurants and hotel accommodation will exterminate Greece’s competitiveness in tourism. I suppose, certain tourism companies were sour to see tourists flocking to Greece like crazy last year, while they were deleting other destinations around the Mediterranean basin.

PS thank God, they did not decide to impose the V.A.T. hikes retroactive and ask us to go back to the supermarkets and pay additional 10% for the one package of tortellini we bought in March, coffee & tea and several kilos of sugar since beginning of the year. 😛

VAT hikes in detail are here (in Greek)

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86 comments

  1. My fellow Greeks, you want the Euro and Eurozone…enjoy it..I have no sympathy for the Greeks anymore..as I said you wanted it you got it..enjoy the Euros you dont have..

  2. VAT in EU countries:
    Jurisdiction Rate
    Austria 20%
    Belgium 21%
    Bulgaria 20%
    Croatia 25%
    Cyprus 19%
    Czech Republic 21%
    Denmark 25%
    Estonia 20%
    Finland 24%
    France 20%
    Germany 19%
    Greece 23%
    Hungary 27%
    Ireland 23%
    Italy 22%
    Latvia 21%
    Lithuania 21%
    Luxembourg 17%
    Malta 18%
    Netherlands 21%
    Poland 23%
    Portugal 23%
    Romania 24%
    Slovakia 20%
    Slovenia 22%
    Spain 21%
    Sweden 25%
    United Kingdom 20%

    Average comes to 21.4%

    Looks like Greece is not suffering that much, comparing to others.
    Can you have government, social services, etc. without taxes?
    Is there more reliable way than VAT to collect taxes in Greece?

    • keeptalkinggreece

      you cannot have an average of VAT because VAT differs for several items & services. You have to compare VAt on food only, or categories only.

      • Understand, the above is not the whole story but it is most of the story. If you do detail analysis, you’ll see that Greece’s VAT is very much comparable to other EU countries. I don’t like taxes but I would like them even less if I knew that I’m paying more than my neighbor does.

        • keeptalkinggreece

          he above is not the whole story = this says it all. but the way VAt rose in many products & services already in 2011 or 2012.

          • Be reasonable. There are degrees of accuracy. One does not have to be 100% accurate to be correct. The point is that Greece is not being punished via VAT any more than other EU countries.

          • Giaourti Giaourtaki

            What’s this nonsense: 19% in Germoney is wrong, there are different taxes, also the islands of Portugal, Spain and Italy all have discount; as you know one gets all details on vatlive.com…
            It’s also a bullshit “argumentation” as it was never any point of the “Troika” to adjust anything. It’s only about destroying and sell-out of Greece that fights back since 5 years to be forced out of the Euro.
            They all want a piece of Greece, a house, a beach, a slave, kiddies for porn, aso because they are just average politicians and EU civil servants. And all this they will get with their payrolls paid by the big biz TUI, Lufthansa, Neckermann, Thomas Cook and Scumbags Inc.

          • René Henri Pasche

            “they all want a piece from Greece”. Yes, they are greedy for the sun and beaches. They do not only want, they got it allready. Make a story out of it, with beuatiful pictures! But it would be fair to mention other countries beside Germany too. There are the French, Americans etc.etc.that are hungry too, a little bit less maybe, because they have their own sun and beaches in their old or new impires and are the better lovers of the “belle Hélène” than the “Krauts”.

          • Giaourti Giaourtaki

            Be sure what you read. In the end they all will have to run for their life as they won’t be able to employ such huge private armies; it will be already a problem getting enough drinking water without providing shower for any bouncers.

          • René Henri Pasche

            I know the water problems in Greece. When I was there the farmers had to drill 400 meters deep, and the fuel for the pumps was expensive. Today it must be even worse. But the happy few have Vittel or other Mineral Waters from all over the world, California included, enough for their lawns, showers and swimming pools. They bring the water by planes and boats, that is why they buy islands to build private ports and airfields. And who knows they will have their own pipelines bringing water from Turkey, in your words from Ionia to Hellas.

        • No it is not. What nonsense you pro-Germans write! The indirect tax rate is related to the revenue from direct taxes and to the actual expenditure of the state, such that Scandinavian countries have very high VAT and income tax to finance a very expensive welfare system. Greece should not have Vat of 23% on non-luxury items. This has been imposed on Greece to extort money, to go to northern Europe.

          Since the Troika took over the running of Greece, the whole tax system has been turned into a system of extortion — all the time with Germans whining that “Greeks don’t pay their taxes. We want out money back. It’s our money, we want it.”

          And the irony is that the money is neither theirs, nor will they ever see it. This is money to finance banks.

          • “This has been imposed on Greece to extort money, to go to northern Europe.” “This is money to finance banks.”

            Anyone here know where the 80 bn from the next package are going to?
            Last I heard about half is for loanpayments during the next 3 years About 25bn to restock greek banks so that ordinary citizens can get to their money instead of forcing a haircut on them. About 10bn go the pension funds.

            So on government level there is still a net flow INTO greece. Isnt that the main reason tsipras felt he had to agree?

            You have said multiple times that you think there should have been a one side haircut in 2010. Lets assume for a second there would have been a 100% haircute/no more debt at all in 2010. That still leaves a huge primary deficit. Since apperently you thought about this I wonder what would have been your plan regarding that deficit?

            Its the same now, I totally agree that at least the lower half of pensions shouldnt be cut anymore, that is primarily a matter of morals. But it doesnt nulify the problem that the funds need to be stabilzed. You dont want to cut and you dont want the 3rd bailout which even after cuts will give bn to the funds, so where would you get the money from/whats the alternative?

          • This sounds like a sensible analysis.

            BTW, you also did not even mention the structural and other grants from the EU, which (I believe) at the moment net Greece around 3% of the Greek GDP. This is a nice chunk of change, but eventually Greece will need to learn to live without it if the EU eventually brings in even poorer countries (like Serbia, Montenegro, Albania, Turkey or Ukraine) and starts subsidizing them.

          • keeptalkinggreece

            at the moment – in fact since 2014 there are no EU structural funds – ask Juncker why

          • All structurals funds????
            I remembered the erasmus article here but when i google for this your article on erasmus or articles that use you as source are the only things coming up.

          • keeptalkinggreece

            yes all. read carefully the article about Juncker’s 35bn package of last week. He openly admits it. Several journos posed a question to EC “since when structural funds cut” and according to which decision. Answer is still pending. the current programs running in GR based on struct funds are from 2013.

          • Garbage. In reply to che, if the correct actions had been taken in 2010 — which was to bankrupt incompetent banks — with the measures taken by Greece since then its economy would now be more or less in fiscal balance and the banks would not be insolvent. All of this current mess has been created by the Troika, loss of confidence in greek banks and the massive outflows, and the destruction of Greece. All to save German and French banks, of course.

          • But xenos this exactly is my point.
            ” with the measures taken by Greece since then its economy would now be more or less in fiscal balance and the banks would not be insolvent.”

            But you oppose these measures. I wanted to know what you would have done differently to tackle the deficit.

            ” All to save German and French banks, of course.”
            Can anyone tell me how much actually was held by german and french banks? Because if I add up the numbers I can find online, greek banks and pension funds were far more exposed in 2010 then german and french banks combined.

            “loss of confidence in greek banks and the massive outflows, ”
            Since the outflow restarted exactly when the new government came into power Id say the nblame for that is at least 50/50

            ” its economy would now be more or less in fiscal balance and the banks would not be insolvent.”
            well the greek banks would have imploded in 2010 alongside the deposits of the greek citizens and unless you can tell me of a way to generate more growth while simultaniously reducing the deficit(that is what interests me most, Ive said so before, I hear a lot about what measures are bad but very little about the alternatives) there would still be a (small) gap in government spending(at least if you include the pension funds).

          • “with the measures taken by Greece since then its economy would now be more or less in fiscal balance ”
            But you oppose these measures, that is the whole point of what i have repeatedly asked and never gotten an answer to. What would you have done differently to tackle the deficit?

            “banks would not be insolvent.”
            the greek banks, probably along with most of the deposits of the greek citizens would have crashed in 2010 already. I guess they mightve been ok by now but that would demand either huge haircuts on depositiors or restocking with government money.

            “loss of confidence in greek banks and the massive outflows”
            well since the outflow of capital restarted exactly when the new government came into power Id say the blame is at least 50/50 on both sides.

            “All to save German and French banks, of course.”
            And greek banks. Anyone have detailed numbers on how much money went to what lenders? Because the numbers I can find online clearly show that exposure of greek banks and pension funds exceeded that of german and french banks combined.

          • “with the measures taken by Greece since then its economy would now be more or less in fiscal balance ”
            But you oppose these measures, that is the whole point of what i have repeatedly asked and never gotten an answer to. What would you have done differently to tackle the deficit?

            “banks would not be insolvent.”
            the greek banks, probably along with most of the deposits of the greek citizens would have crashed in 2010 already. I guess they mightve been ok by now but that would demand either huge haircuts on depositiors or restocking with government money.

            “loss of confidence in greek banks and the massive outflows”
            well since the outflow of capital restarted exactly when the new government came into power Id say the blame is at least 50/50 on both sides.

            “All to save German and French banks, of course.”
            And greek banks and other countries banks and bondholders.. Anyone have detailed numbers on how much money went to what lenders? Because the numbers I can find online clearly show that exposure of greek banks and pension funds exceeded that of german and french banks combined.

          • The problem with the greek banks today is 100% that people took their savings out of them. Nothing else. They did so because of the mismanagement of the whole situation by the Troika and previous Greek governments.

            The holding of Greek government bonds was a problem — and remains one — in respect of collateral. That was the same problem as the German and French banks. However, do not forget that US and UK banks were allowed to go under, and others were kept alive with government money. Greece did not have access to international markets after the idiot Papandreou went around the world telling people that Greece is a bankrupt country with people who don’t pay taxes and is a terrible place. The fact that he did this (not to mention that it is mostly the rich including the criminal political families like Papandreou who do not pay enough tax) is a large part of the reason why Greece is now in this mess.

            Basically, banks survive on public credibility. Remove that, and they collapse. That has been the history of banking since it started, and Greece is no exception.

          • “The holding of Greek government bonds was a problem — and remains one — in respect of collateral”
            But that would be different the moment an actual haircut is implemented right? At that moment it turns into actual losses?

          • Giaourti Giaourtaki

            That’s of the same propaganda net of lies that has been spun for months “the money was brought abroad”, in reality the outflow re-started in November with its highest numbers in January BEFORE the elections, also the banks were solvent until the Troika culminated their months of blackmail into the central bank’s illegal refusing to be a central bank.
            It also never puts into consideration that many Greek families are just exhausted after 5 years without enough income and that this would also would have happened for months if there wouldn’t have been snap-elections, as the blackmail already started one year ago with ND refusing the VAT-hikes in tourism and this at a point when the VAT-hikes couldn’t be “excused” with the actual terror but were clearly to be seen to destroy the tourism-sector and to let big biz win in Turkey, Spain, Italy and Portugal: TUI, Neckermann, Thomas Cook etc.

    • René Henri Pasche

      Even if VAT seems to be the same for all EU members, the big question is: what do the tax payers get in return for their many. Compare Greece with countries like Sweden, Switzerland, Netherlands or even with the Baltic States, and you will understand why the Greek taxpayers are so furious. What do they get in return? Nothing.

      • Giaourti Giaourtaki

        One reason why Varoufakis was warning that this will only lead into more tax-“evasion” and “black-labour”, so at least Greece is on her way to revolution by destroying a state that has no right to take any taxes.
        Ikaria will be the first island that will declare itself independent, followed by the areas which were never occupied by Ottomans.

      • According to official EU data from europa.eu, in 2014 the public sector (public administration, defence, education, human health and social work activities) is the second largest in the Greek economy (20.8 %). This does not include other industries with significant presence of the Greek state (e.g., transportation). I would not call that “Nothing”.

        That compares to

        24.5% in Sweden,

        23.2% in France,

        22.4% in the Netherlands,

        22.2% in Finland,

        20.7% in Cyprus,

        19.4% in Malta,

        18.6% in Spain,

        18.2% in Germany,

        17.0% in Slovenia,

        15.4% in Estonia and Croatia,

        15.1% in Latvia,

        14.5% in Slovakia,

        13.9% in Lithuania,

        13.2% in Bulgaria,

        10.3% in Romania.

        Yes, Swedes and Dutch get more for their taxes from this perspective, but the Baltic States invest less of their taxes into the public sector.

        • Sigh. The point is not about the size of the public sector but what it delivers. Also, bear in mind that the private sector is very weak in Greece: even where it exists, it tends toward oligopoly or even duopoly/monopoly.

          Since much of the public sector was used to create jobs (usually as part of political patronage) those who did not receive the jobs resent this. The primary problem of the Greek economy since the 1970s has been distortion through political interference: now the Troika has made the situation even worse! It is very clear that the high tax rates imposed since 2010 are of little benefit to citizens, so the Troika has managed to worsen the opinion of Greek citizens about the value of paying taxes.

          Well done, morons! How to make a bad situation far far worse…

        • Giaourti Giaourtaki

          0:2, your goalkeeper’s hate is getting a storm: 90% of transportation is private anyway, if all the ships and ferries would be state-run the official data would show Greece’s exports as strong as Germany’s and nobody could tell the lie of “Greece being non-competitive” any more and if the EU would guarantee it’s outside borders no need for defence!
          So in the end Greece gots a really small public sector and then count into it that public servants numbers went down from 900.000 in 2009 to now a bit above 600.000.

  3. It might be helpful to recall how the VAT increases were agreed upon. Four weeks ago the creditors and Tsipras agreed on the primary surplus for 2015-2018 (1% of GDP for 2015). Tsipras sent his proposal how to achieve that, and two days later the creditors responded with a counter-proposal. The negotiations continued until the end of that week (June 26) when Tsipras called a referendum. The final agreement struck on July 13, however, was still built on the latest results of that negotiation (particularly, on the VAT rates).

    Increasing taxes indeed has negative impact on growth. It does not improve competitiveness. As the rest of the austerity measures it is just an indication that the country borrowed too much during the good times. Reducing taxes stimulates growth. This is one reason why the creditors (IMF especially) balked at Tsipras’s proposal to pay for > 90% of the agreed primary surplus by tax increases, and very little — by spending cuts, so that SYRIZA can avoid crossing its “red line” (e.g., no cuts to pensions). Nevertheless, the balance largely was tipped in favor of tax increases in the final agreement. It was hedged by a promise of the Greek government to automatically cut spending if the tax receipts end up being insufficient, so Greeks my end up in the end suffering from both.

    The confusion around which VAT rates apply to what products is also due to the insistence of the Greek government to apply 13% rate to “basic” foods, while the creditors countered with a proposal for that rate to apply to “unprocessed” foods. The former is ambiguous; I believe I commented on that. In the final agreement the creditors relented and the Greek government got to chose which foods are “basic”. I am not certain why they decided that souvlaki with peppers is not “basic” food”, but souvlaki without peppers is.

    • The same difference seems to exist in Poland. Processed versus unprocessed food. Particular items are different , of course , depending on climate and customs.
      And stories about coffee drunk standing or sitting (different VAT), if I well remember, were from Germany. With VAT, there is always plenty of fun and insecurity.
      But of course it is a very recessionary step – Greeks have again less money in their pockets…

      • Such subjective differentiation in rates is not only a cause of confusion. It also creates opportunities for corruption (particularly in a country susceptible to corruption). It allows politicians to create winners and in the economy on a whim.

        Ideally, all rates (especially, all food rates) should be the same. Add medicines into that category as well (to prevent food supplements from mascaraing as medicines or as food — whichever has lower rates).

    • Giaourti Giaourtaki

      At the moment it will make no difference if Tsipras or the EU-scumbags are responsible for this charade, now its only of interest to get this terror-measures sabotaged with militant wild strikes and the revolt of the working classes. Never forget that the origin of political parties is the fan-culture in Circus Maximus.
      Later on we will see that never paid reparations and illegal and odious debt play their roles

  4. I think VAT increases are finally a good way to force Greek businesses to reduce net prices. Nobody will pay 10% more for restaurants or hotels, if there are alternative holiday destinations.

    • Giaourti Giaourtaki

      And if Greeks don’t pay to get any job as a slave you will send in German unemployed who do it for 1 Euro an hour, guess?
      The forces behind the VAT increases are Spain, Italy and Portugal, they were pissed by jealousy to see that Greece was competitive last year with low VAT and they really went angry seeing the tourists escaping Tunisia going to Greece and not heading to their beaches; may be they paid the IS-gunmen?
      Same regarding the islands but hopefully the crisis will hit back and these corrupt traitors will pay their price just like all: It will be such a fun to see these Ubereuropean traitors of their classes calling the UN for help against starvation when their welfare system gets smoked by the EU-Mafia.

      • René Henri Pasche

        GiGi I am going to love your comments. You are the spices in the sauce or the salt in the Sauerkraut. Your temperament looks a bit like a combination of Socrates and Zorbas. “I expect nothing; I am afraid of nothing; I am free”. May be it is the only way to be happy in Greece without Euros. In Miller’s times it was so, i have learned, but today?

    • Prices will not be reduced.
      All it will do is further shut down the economy of Greece.

    • Do you? What a pity that economists across the globe and the evidence of economic history do not share your opinion. In fact, the opinion of all experts is that it is a disastrous policy that will further damage Greece and achieve nothing at all other than increased poverty.

      I suppose you are German with this sort of stupid mentality.

      • Yes, I am. The Greek economy was unsustainable before 2010 (otherwise no need for a bailout). Reducing the state’s expenses by halving wages and pensions wasn’t quite popular and maybe contributed to rising unemployment. Syriza managed to “destroy trust” among the other finance ministers, but didn’t manage to tax or to expropriate the rich. So I see no other option than increasing taxes. Germans are very price-sensitive (or thrifty) by default and if Greeks are on a tight budget now, it might also boost competition resulting in lower prices. The most efficient businesses will survive and can then also export worldwide.
        I don’t see any other option. Without a balanced budget nobody invests in Greece due to fear of a Grexit.

        • Giaourti Giaourtaki

          Goebbels-Media: The special tax for over 500.000 was not refused by the Troika-extortion-ring as unilateral action

        • perhaps your German dictionary mistranslates the word “unsustainable” — because your comprehension of it is totally incorrect. It does not refer to a short-term situation, but to a long-term prognosis. The principal problem in 2010 was short-term budgetary management and long-term debt. After the Troika fucked up Greece, the problems are long-term debt, long-term economic viability, short-term budget management, long-term employment levels, long-term pension payments, etc etc. ALL OF THESE PROBLEMS WERE CAUSED BY THE TROIKA.

          So, just quit repeating the Kraut propaganda and deal with reality.

        • In order to have the prices go down you also need competition. Therefore, structural reform in Greece is paramount.

          It seems in Greece there are a lot of structural impediments to competition with laws, rules and regulations protecting vested interests. That is intuitively the main explanation I can think of why food prices in Greece, for example, are much higher than in neighboring Bulgaria. The same EU standards should apply and the tastes are similar, so very similar foodstuffs must be sold in both markets. There are no customs duties between the two countries and the transportation costs are minimal — so moving food across the border from Bulgaria should be a no-brainer if sourcing prices were a factor. Yes, the salaries of the store clerks are higher in Greece, but in Bulgatia the VAT rate on food was until recently and probably still is higher (per vatlive the “universal” 20% VAT rate applies to all food items — whether salty or not, whether with peppers or not :-)). Some can argue also that the demand side in Greece is stronger due to the higher incomes. However, if that was the only factor, the prices in Greece would go down as soon as the incomes go down. I am not certain this is happening.

          • A NY Times over the weekend mentioned an interesting fact: the non-prescription medicines in Greece cost 27% higher than elsewhere in Europe, courtesy of laws and regulations of this segment.

          • keeptalkinggreece

            also prescription medicine was overcharged in some cases prices dropped form 50euro down to 27 euro. but think any health minister was ever taken to responsibility over these overcharges? no…

          • The EU refuses to have a common market in pharmaceuticals, despite this being required by the European Treaties. The reason has never been given, but seems to be linked with political corruption and national interests.

            So, my advice to you who complain about greeks paying higher prices? WHY THE FUCK DON’T EUROPEAN POLITICIANS SORT OUT THE MESS?? Complaining about Greece when there are actually equally serious problems across the EU is getting to be very boring and stupid.

          • “In order to have the prices go down you also need competition.”

            Do explain to me in which economics book you have read this rubbish. because it is NOT CORRECT!

            And everything else you have written here about economics is wrong, too. I am not going to go through explaining it. You just have to accept that you do no know what you are talking about. The stupid idea of “internal devaluation” that the boneheaded german economists came up with, is pure nonsense: cutting wages and household income does not make an economy competitive: it is likely to destroy it with economic collapse (which is what happened)

            The sad thing with you all of Troika apologists (plus the German economists) is that you go against all of human knowledge to claim nonsense, are proven wrong empirically, and yet you still insist that you are right and all of economics and the entire world are wrong. This is nothing short of arrogant lunacy. A lunacy that makes the greeks suffer, while the German profit… Hmmm, how strange it worked out that way! Surely, that could not have been the intention all along?? Are the Germans really so dirty and dishonest as to do that?

          • Huh!? Are you saying that higher level of competition in a given market (e.g., among Greek sellers of medicines or foodstuffs) will _not_ reduce the prices? That certainly should improve the “supply” side of of the supply-demand equation. Econ 101

          • For my part I honestly believe in these “German” economics. I don’t see any benefit in capitalism without competition. Otherwise you end up with monopolies or oligopolies who set optimal prices higher.
            If Greece had defaulted, it would probably have devalued, so how could that have been better for Greece? Or are you just waiting for a chance to buy Greek property at a bargain price 😉

          • What is wrong with you people? The comments made here are not economic ideas — they are Troika propaganda. They have some relation to right wing neoliberal economics — which has now proven itself to be a disaster across the globe.

            And do you think that the USA and UK are not dominated by oligopoly and monopoly? Is that not the obvious outcome of closing down almost all small businesses and allowing big business to take over? Far from creating competition, neoliberal policies (claimed to do such) have REDUCED competition, and even created monopsonies that were previously unknown. The nett effect has been a transfer of income from the majority of the population to big business — even to the extent of creating new poverty.

            Or concerning deregulation in Greece of specific sectors — already a global disaster with banking. The effect in Greece has been to increase the number of taxis such that there is a massive oversupply — far too many for the work available. The same with pharmacies. Or the compulsory Sunday opening for the retail: this does not create more sales or improve competitiveness: it actually reduces productivity.

            You do not improve an economy by destroying it. This is a very clear lesson of both history and economics — and one which the Germans pretend they do not know. They are liars and cheats, of course.

          • I agree.
            In Germany taxis and pharmacies are regulated to prevent oversupply. In most states shops remain closed on Sundays. Books have a fixed price to keep small bookstores alive. We have functioning institutions fighting for competition (Bundeskartellamt, Monopolkommission, Verbraucherzentralen). We have at least 17 public funded TV stations. Bishops are paid for by the state. Subsidies for renewable energy generation are fixed for 20 years. Access to private forests is guaranteed to everybody for recreational purposes. Private property can be expropriated due to public interest. Theaters, swimming pools, museums, sports clubs etc. are heavily subsidised. TTIP is opposed by a majority. Altogether: Germans want a strong state.
            Greek politicians maybe should discuss the detailled policies in German media. If we knew the policies in more detail, there would be opposition. Nobody here expects Greece to become more “neoliberal” than Germany, just less corruption and bureaucracy is wanted.

          • Well we have some agreement on what not to do, at least. Recently, some UK economists appeared on tv saying that all of the things being imposed on Greece would be unacceptable in Germany — so why was Germany doing it to Greece?

            And Varoufakis does appear in the German media saying these things. No government has done more than Syriza to address corruption — so why does Merkel hate them? Answer: because they argued instead of taking orders from the Vaterland.

      • René Henri Pasche

        you are free to like or not to like the Germans. But do not call them “elephants with brains of sparrows” as a minister of PASOK dared publicly say a long time ago. The Germans will neither forget not forgive and the revenge will not be sweet. That is the bad side of their otherwise quite friendly caracter.

        • The Germans seem to have forgotten their crimes against humanity, their debts being forgiven and a whole lot of other things that are inconvenient realities. In other words, you may look like clumsy elephants but your brains are rather less impressive than those of elephants. More like an ant, perhaps?

          • René Henri Pasche

            yes , but for the Germans “brain” means “intelligence” not “memory”. They are convinced that they belong to the most intelligent race in the world – like the Greeks. Maybe that is the reason why they will never understand eachother

    • costa sakellariou

      alternative ‘holiday’ destinations.

      unfortunately once again thinking about the fate of the holidaymakers…

      who cares about holiday destinations at this point?

      what will happen to all the tavernas where people go out to relax – it is a central part of life in greece…they will further reduce their net? at this point, they will all close through lack of business!

  5. Question:

    Are you Greeks getting together to figure out a way to get the government to spend less and possibly shrink? I read that one year government expense to GDP was an incredible 59%!

    That means the government consumes and gets 3/5 of the reported gross production of the country. Because gov. expense divided by GDP is a fraction GDP going down raises the expense to GDP ratio.

    Are you trying to figure out how to make sure the public good is the client and not special interests?

    Ideas:
    1. Constitutional limit on expense both cash basis and accounting accrual basis.
    2. Constitutional limit on the number of public employees.
    3. Public auditing by the private sector.
    4. Accounting controls with all records available on line, in cvs format, web accounting forma
    5. Limit or ban on government borrowing from banks with deposits.
    6. Loan to value or rent limits for buying property to prevent bubbles and over payment to prevent deflation of price from loan induced price rises.
    7. Private sector measure how much the government crowds out and add friction to the economy.

    • 59%bullshit

      how hard is it to use google? 30 second search 3 sources found that place it clearly below 50% (for 2014 around 45-47%). Btw the countries with the highes percentage of governmentspending to gdp are the scandinavians aka the most successful states in the world.

  6. Why blame all of the VAT on the EU. Who spends and collects it?

    • keeptalkinggreece

      why blame EU? the EU creditors send the bills to Greece and the Parliament votes them

    • I have a question. Why do all these people who know nothing about the Greek economy, very little about economics and apparently next to nothing about what the Troika has done to Greece over 5 years, come here and make stupid suggestions and/or comments? There is a large collection of them here.
      If you want to ask questions, nobody will mind. But the sheer arrogance of telling people about solutions problems you know nothing about is just incredible!

      • keeptalkinggreece

        it is a free world and a moderately censoring blog and therefore everyone is allowed to post his opinion and Greece’s success models.
        Of course, I cannot help wondering again and again: with all these advises and proposals and Plans-ABC by economists, analysts, journos and internet users how comes there is still no solution for the Greek Debt Problem.

        • I’m not trying to censor anyone — just openly wondering what is wrong with people’s brains.
          As for your question, the answer is very simple. All solutions to the problem require the rich (and German banks specifically) to lose a lot of money. They are much happier with destroying an entire country and making the people across most of southern Europe suffer. There are no technocratic solutions to facilitate extracting blood from stones — and the Troika’s intent is pretty much that.

        • Tsipras is working on it 🙂

      • Thats easy xenos, most of the time people will see flaws in others clear as day but are not able to reflect on themselves, just like you and Giaourti dont see that you are using racistsst language and overtones all the time these pewople dont see their own limited knowledge on the subject.

        • Oh really? YOu think that your grasp of the economic realities is as good as mine? You think that you know as much about Greece? hahahahahahya.

          Yes, your arrogant comment explains things.

          • No I dont xenos. And I didnt say so. I said many people dont reflect on themselves.
            I accept your economic expertise, thats why I keep asking you question(like what alternative plans you would have had to get the deficits down in 2010) which you rarely answer.
            on the other hand you apparently know shit anbout germany otherwise such ideas like the vast majority of modern germans are nazis/follow nazi ideology.
            The racism part is more pronounced with giaourti, but another thing both of you might reflect upon is your tendency to just overlay your impression of a person over what they actually said.

            “You think that you know as much about Greece? ”

            I really dont get how come to that conclusion from my post.

          • I don’t claim expertise on Germany. I know the standard economic literature on Germany, though — which is probably more than you do.

            And I haven’t said that the Volk are Nazis: I have said that Germany (as a political power) is repeating the pattern of abusive behaviour that we have seen in the past. Some of that predates the Third Reich — but the shorthand and aggressive way to describe it is from that period. Everyone knows it.

          • “And I haven’t said that the Volk are Nazis”

            Yes you have

            ” As for individual Germans, this depends very much on whether they pursue a traditional Nazi-style agenda (dressed up with neoliberal economics) or engage in enlightened discussion about how to manage the problems of the eurozone that they are primarily the creators of. The vast majority of Germans now fall into the first category.”

            Btw. even if you disagree with everything merkel and schauble do its nowhere near a nazi agenda.

          • Also you get insulting as soon as someone shows an opinion different from your own. I dont care about insults as such but it certainly doesnt help a rational discussion/ convincing other people of your pov.

          • “Nazi-style agenda” is not the same as saying that people are Nazis. You may think so, but it is not: I am emphasising the way that people think about the world, not calling them names. It is essentially a moral and philosophical issue: do you think that people’s rights are contingent on status, money and power? Or do you think that people have rights, full stop?

            The Third Reich was very clear in choosing option (1). Not many Germans today are choosing the other option: so is there really any change in mentality?

          • It seems to me that you confuse capitalism with nazism. Both certainly have very nasty consequences, but the motivation is completly different. Status money and power were rather irrelevant to the nazis, or at least a far second to race, political views and physical attributes like sexual orientation, disablities and looks.
            For the nazis money was only important as a tool.
            The capitalists on the other hand only care about the money.
            Now neither is moral but still there are huge differences.
            When you tell me someone has anazi style agenda I would assume that entails such things as rampant raciscm(especially but not exclusivly against jews) certainly a military agenda, the clear belief in ones own superiority due the fact that they were born german. It would also entail things like censorship and/or physical attacks against other political factions.
            All these things you cannot find in modern day germany except for a very small group that gets denounced by far larger groups of protesters any time they show up publicly.

            Ill tell what has not changed since nazi times, though i would assume this is the case almost everywhere.
            Not even during the height of their power I would have classified the majority of germans as nazis. The vast majority is people who dont give a shit about anyone but themselves and (maybe) their closest family and friends. While this isnt as bad as actively persuing negative agendas(whether its predator capitalism or nazism) it is what makes the bad things possible.
            btw. I know a whole lot of people who actually think the austerity measure will help the greek people in the long run. Absolutly no bad intentions there just a consequences of what you rightly get frustrated about, ignorance about economics.

          • I do not confuse anything with anything else. The Nazis were obsessed with their own idea of status — based on ethnicity — and also with money and power for themselves. I see no difference with modern Germans. The belief is that German “values” and beliefs are superior to those of other cultures: there is complete intolerance of difference, especially when the other culture does not have money or power.

            Capitalism itself is not particularly concerned with status, money and power. It operates on principles of economic behaviour and wealth accumulation that are in theory independent of such things. In practice, we do not have functioning capitalism that is without serious market distortions caused by concentrated power and abuse of wealth — and these problems have become very serious in the last two decades. Market competition? hahaha, no way. Across the developed world, markets have become less and less competitive and more and more aggressive in their exploitation of their suppliers and workforce. This is not the capitalism of 50 years ago: it is the nasty sort of abusive system that Marx described in the mid-19th century. It is entirely consistent with Nazi beliefs, and inconsistent with the post-war consensus that Europe used to have.

          • Xenos ill agree that there are differentshades of capitalism and not all all necessarily bad, but you contradict yourself.
            “Capitalism itself is not particularly concerned with status, money and power. It operates on principles of economic behaviour and wealth accumulation”
            What is wealth(in this context) other then money power and status?

          • The human drive for betterment (which includes many things) includes for many people and organisations the acquisition of more assets or money. The pursuit of such acquisitions is very different from the possession of such, different from an obsession with the possession of such, and different yet again from the abuse of holding such.

            As far as I am concerned, capitalism as a concept (in its most accepted form) embodies only the first of these — the pursuit of wealth. Highly unequal ownership of wealth is definitely known as causing serious distortion of markets, damage to economic growth, and damage to society and individuals. That is why markets used to be properly regulated, and why that sort of regulation is essential now. If it is not brought back, the only choice left to the mass of people is violent revolution and something akin to civil wars.

          • René Henri Pasche

            “germany as a political power”: that is to say the governments, the power elite, the “classe politique”, the establishment, the political parties with their foundations and think tanks etc. etc. They speak the same language and are still modest or fierce nationalists and followers of Bismarck, Treitschke, Rohrbach etc. But the majority of the German people seem to be rather indifferent and ignorant of their past. Of course they are manipulated by the ruling few. If that is what you wanted to say I agree with you.

          • Giaourti Giaourtaki

            That’s it how they do their job today. Ignoring that generations of migrant workers get discriminated until today – for Germoney it’s easier to get educated staff from abroad than to educate its own youth – and then name war-reparations racism. Sometimes they shoot 100 shots into the getaway car before they recognize that not even one bullet hit a wheel: when they point out that Marshal Plan is no way because that Greece’s economy is so bad is Greek fault and back then was simply war.

          • You point out that finns arent european cause their ancestors hail from mongolia. You ucall eastern europeans eastern “europeans” to indicate they arent worthy to be called european, I dont even need to get into what you call germans in general(not in any specifc way connected to their opinions or action, no they are bad because they are of german decent).
            How is that not racist on your part?

          • Giaourti Giaourtaki

            That True Fins belong to Mongolia is an antifascist slogan from Tampere

          • René Henri Pasche

            come on my friend, you make me laugh. Nothing is perfect, neither in Germany nor in Greece. Everywhere you have the good and bad ones, but the big majority is just between these extremes, changing the sides many times. There are problems with migrant workers, who would deny this, but do not forget the many positive results already achieved. I know many Greeks that are happy to live in Germany and to work there. Most happy are those who get their pension – to support their families in Greece. It is always easy to criticize the other people and countries. What did the Greek government do with all the Albanian workers that tried to find a job in Greece? So what?

          • keeptalkinggreece

            please, carry your RHP +GG history/global-whatever debate in another blog/website. or exchange email addresses?

  7. René Henri Pasche

    Agreed.