Is Greece all sorted now?

Wookster

Good article on Greece and Tax here:

http://ftalphaville.ft.com/blog/2012/07/24/1094491/only-fools-pay-tax-the-greek-edition/

The upshot is that only fools pay tax in Greece because the state is incapable of collecting taxes from that year waaaaaaaay back in 2010.

The amnesty could cover arrears up to the end of 2011, sources told Kathimerini. The Finance Ministry will also introduce fast-track auditing procedures to clamp down on evaders, sources added.

Previous governments have virtually ignored the tax cheat problem, and while some 200 tax evaders were arrested earlier this year, there have been no high-profile prosecutions and the effort has brought in only a small amount of what is owed. The Troika has been pressing Greece for two years to do more about tax evasion but the government has been reluctant to press for more collections.

The new coalition government is beginning to cross-check tax records but is not allowed to investigate bank records, although a recent report by three researchers in the United States, including two Greeks, found those were more reliable and likely to indicate true worth and identify tax evaders

Time for all support to be cut off. If the Greeks cannot help themselves, then why should the rest of Europe help them.

Graham_Devon

It's all well and good chasing tax that people owe, but if they haven't got the money (and many in Greece don't) it's a pointless and costly exercise.

If increasing the tax take by way of claiming arrears sends more into poverty, it's even less spent in the economy, and an even worse recession, which means cap in hand all over again.

Sometime you just have to cut your losses. Greece know they need to. The EU on the other hand, know they need to, but will do anything to avoid it. All IMHO.

Wookster

Graham_Devon wrote: »

It's all well and good chasing tax that people owe, but if they haven't got the money (and many in Greece don't) it's a pointless and costly exercise.

If increasing the tax take by way of claiming arrears sends more into poverty, it's even less spent in the economy, and an even worse recession, which means cap in hand all over again.

Sometime you just have to cut your losses. Greece know they need to. The EU on the other hand, know they need to, but will do anything to avoid it. All IMHO.

Thing is they aren't even trying. And what precedent does it set for people if they grant amnesty after amnesty? There is much 'fruit' by way of outstanding taxes, they have even named 4,000 or the worst offenders (http://www.huffingtonpost.com/2012/01/23/greece-names-4000-tax-evaders-effort-recoup-lost-funds_n_1224246.html) and on that list is one individual owing over €1bn! One third of the shortfall they are seeking!

If they can't get basic things right, why on earth should anyone help them? The least they could do is lock offenders up!

Thrugelmir

Graham_Devon wrote: »

It's all well and good chasing tax that people owe, but if they haven't got the money (and many in Greece don't) it's a pointless and costly exercise.

No tax collected = No money to spend public expenditure

Basic financial principle. Collectively the people will have to decide.

worldtraveller

Economists at Citigroup are now calling a 90% chance that Greece will leave the Euro within the next 18 months, up from their previous estimate of a 50-75% chance.

"Within this subpar global outlook, we remain gloomy on the euro crisis. Our base case is for prolonged economic weakness and financial market strains in periphery countries, spilling over into renewed recession for the euro area as a whole this year and the next.

We now believe the probability that Greece will leave EMU in the next 12-18 months is about 90%, up from our previous 50-75% estimate, and believe the most likely date is in the next 2-3 quarters. As before, for the sake of argument, we assume that “Grexit” occurs on 1 January 2013, but we stress this is an assumption rather than a forecast of the precise date. Even with the Spanish bank bailout, we continue to expect that both Spain and Italy are likely to enter some form of Troika bailout for the sovereign by the end of 2012.

The Telegraph

Generali

Ronnie_Grimes wrote: »

Greece must pay its next round of bond redemptions on August 20, and over the weekend the IMF stated that they are suspending Greece's future aid tranches due to lack of reform. August 20 might be the most important day of the entire summer

Apparently Greece is looking for an advance on the money that is meant to be paid to them in September to pay that maturity out. Whether they get it or not is a different matter but clearly another default so soon after the last one wouldn't play well with the markets.

ILW

There seems to be very little political will within the Greek government to start collecting taxes. Could this be that secretly they do not expect to be in the Euro much longer?

Thrugelmir

ILW wrote: »

There seems to be very little political will within the Greek government to start collecting taxes. Could this be that secretly they do not expect to be in the Euro much longer?

Southern Europe is heading for depression. Hard to see where the required growth will come from to rebalance the economies of same. The dream of a federal Europe appears to be fading fast.

Mrs_Bones

Thrugelmir wrote: »

Southern Europe is heading for depression. Hard to see where the required growth will come from to rebalance the economies of same. The dream of a federal Europe appears to be fading fast.

Personally I think the quicker the dream fades the better. If we can get a dose of reality in and people realise that a one size fit's all isn't going to work with the Euro, maybe things can start to be resolved.

Thrugelmir

Mrs_Bones wrote: »

Personally I think the quicker the dream fades the better. If we can get a dose of reality in and people realise that a one size fit's all isn't going to work with the Euro, maybe things can start to be resolved.

Trouble is, its going to impact the UK. Longer the Eurozone struggles on. The more time the UK has to take corrective action the better.