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An unfolding Greek tragedy.

The newspapers are full of photos of unseemly fighting and general unruly behaviour; If it’s not the Canadian hockey fans, it’s Ascot and if its not there then its Greece. I feel saddened when I see the images of Athens, ignoring the anarchists, of the common working man who is caught up in the problems. I’m a regular visitor to Greece and I like the laid back approach to life and the general demeanor of the Greeks but talk to any small business man and he will tell you that tax avoidance is a national sport and that in part means there will be some painful years ahead.

 

Greece is a net debtor, it is spending significantly above its GDP hence the massive austerity program and equally is incapable of collecting taxes and so how does Greece come up with the money to repay its debt? I believe the Euro Tsars have much to answer for here. In their haste to expand the Euro they had their heads in the sand when Greece joined up or did they just nod through the accounts for Greece PLC. Greece was like a child in a sweetie store and thought that being aligned to the European big boys like Germany would solve all its problems, and in the short term that's what the borrowing did, but by sparing the rod at the start of the process they have ruined the child.

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Comments: (1)

A Finextra member
A Finextra member 17 June, 2011, 11:37Be the first to give this comment the thumbs up 0 likes

Well said.  Like the banks though - Greece cannot simply close shop and stop.  So how to restore net positive GDP? Paying taxes is a start and those avoiding it have to realise that in other economies, tax is paid. The EU is paying the overdraft, but the cashflow has to be turned around - there are no sweets left in the barrell.  Rioting will also unfortunately affect one of the few assets Greece has which is tourism.