21 September 2012


The purpose of this blog is to highlight the corruption, injustice and the destruction that has caused the Greek party "system", "partocracy" (word compined from "party" and "democracy", κομματοκρατία =  ruling of the parties, as the Greeks name it), the "Greek caste system" as I call it. It is a "system" where:

  • Young people with party connections can easily find a "job" (not so hard of course) in the bloated public sector, guranteed for life by the institution, while others in the private sector have two jobs to get by, always fearing a dismissal (unemployment is 30-35% today in Greece)
  • Businesses loyal to the ruling parties and families that dominate Greece for many decades, get the contract to build a road, to supply public hospitals etc. despite their competitors having a far cheaper and better offer. These businesses pass a virtual, made-up check by the tax evasion authorities
  • It is hard to be appointed as a university professor, unless leftist parties back you, or get a policeman rank unless the pseudo-right party backs you too
  • Pensions and privileges where donated to many-many people and groups who did not deserve it, just to buy their votes: 8% of the population in an island have got the blindness pension, unmarried daughters of militaries get a pension even if they are 60 years old, public employees got a subsidy for "arriving in time at work" (to name a few), while at the same time others have a problem paying their taxes and heating their houses
  • Partocracy does nothing for the influx of illegal immigants to Greece (it neither expels them, nor assimilates them) because it sees them as a very cheap and easy vote in the future.

From 2010, since the sovereign debt crisis erupted in Greece, the IMF and the EU have started to understand what is happening in Greece. They insisted on needed reforms. Partocratic, corrupt polititians with stubbornness and cunningness resisted to all. Instead, they proposed to repay the money, by raising taxes in a way that is unafforable for the ordinary Greek citizen.
Partocracy (with the tacit agreement of EU/IMF) drowned the productive, legal, healthy, hard working, not party-related elements of Greek society in taxes just to save the nested interests of its protected members. This is the real party racism, a form of caste system.
Needless to say that the partocratic system favors laziness, stagnation, underdevelopment, cronysm, corruption. Why work, innovate, risk, since I can get a well-paid job or a good contract just by wiggling party flags in concentrations?
No wonder that today's Greece produces only tourist services, olive oil, wines and ouzo of course.

Here is an article of Wall Street Journal (15/01/2013) that corroborates what I say:
WSJ: Greek Tax Insanity

Can a country tax itself into economic oblivion? An outside observer might well conclude that Greece is running an experiment to find out. The Greek government imposed another big tax increase Saturday to appease the European Union and the International Monetary Fund. The latest measures will raise the corporate income tax to 26% from 20% and push the top individual rate to 42% from 40%.
Nearly three years after Athens was first bailed out, it remains dependent on the EU and IMF to fund its budget deficits and roll over existing debt. That debt, by the way, has gone to 170% of gross domestic product from about 120% when the EU first intervened. Nearly all of the debt is owed to Greece’s European neighbors and the IMF.

Understandably, those creditors expect and want to be paid back. They have repeatedly eased the repayment terms and lowered the interest rates on those loans. But their insistence on ever-higher taxes won’t improve their odds of seeing their money again. The Greek economy has been shrinking for five years straight, and Athens started out with a huge budget deficit and bloated government when the crisis first erupted.

One of the measures passed Saturday is a requirement that nearly every Greek citizen fill out a tax return, in a bid to cut down on tax evasion. But those who feel no compunction about not filing a return today are unlikely to shrink from filing a false or incomplete return under even higher tax rates. Athens says it expects the new taxes to raise €2.3 billion euros this year. Here’s betting that these latest measures, like Greece’s earlier rounds of tax hikes, come up short.
Meantime, Greece’s neighbors seem to understand the benefits of lower rates. Bulgaria has a 10% corporate income tax and a 10% personal-income tax, and it expects 1.5% growth this year—not thriving, but not in free-fall, either. Turkey’s standard corporate income-tax rate is 20%. Growth there is expected to come in at around 4% this year.
We keep hearing that Greece needs to make its economy more competitive, which is true. But it won’t do that by making its tax code more punitive. Greece needs to break out of the EU-IMF austerity trap, and one way to do that would be with a flat-tax reform. Its current road will only lead to more hardship.