Greece's Sovereign Debt, season 4: Time to Pack it in?

Greece has a new tax & fiscal law every year. In other words, doing business in Greece is always full of surprises, with changes occurring at least once a year -- EVERY year.

The country's socialist government has finally passed a law proposing very strict rules against tax evasion, including incarceration with summary process (of law presumably). This applies to private individuals for personal income tax & VAT as well as CEOs, for corporate tax & VAT, etc.


This is surely to be lauded; stricter rules against tax evasion are long overdue in this country. Unless more things change however, it seems that it is time for expatriates and would-be investors to start packing their bags, pronto.


There are four reasons why this new law, welcome as it may be in principle, may be put the definitive and proverbial spanner in the works:

1) Trustworthiness
In a country where, by its representatives' admission, the rule of law often depends upon whom you know, the cost of, say, a mistake in ANY tax related issue, made by ANY of the stakeholders, can mean that on Friday night, CEO's kids will have to run to the closest gaol to see their dads until the whole thing "is sorted out". How confident are you that it will be?

What is the price of uncertainty?

2) Corruption:
According to Mr Geoff Papandreou, Greece's Socialist Prime Minister, "there is a lot of that around". And we believe him; and many people having built a house, filed for a license, cashed in a tax return, etc, can actually corroborate this through personal experience...
YET, the Greek government continues to protect the taker, and penalise the giver. Strict rules apply to abbetting Were we to attack corruption, it would make sense to exculpate the giver and penalise the taker, surely?

3) Uncertainty:
Doing business in Greece has just become more complex and more uncertain. We all like the rule of law and the new tax law is no doubt welcome in this respect. But it does not come with a loosening of rigid bureaucracy -- in fact, quite the opposite.

4) Justifying recruitment:
Despite the 7% fall in real GDP, Greece's socialists still bow to the country's restrictive labour regulations: flexible employment is so regulated that temporary, agency work is proscribed. One has to JUSTIFY recruitment in no uncertain terms upon the employment contract -- or the employer and the agency are subject to steep fines. Justifiable temporary or other wise flexible employment seems to be too complex a matter.
No-one but the most courageous employ temps any more in Greece! Most prefer to downsize.

With "real" (i.e. beyond "Greek statistics") unemployment running at 17.1% according to Ministry of Labour sources, one completely fails to understand:

Why???

Why, for goodness sake, do Greeks in power not liberate their employment market? What is there to gain by abetting grey & black labour -- which sidesteps regulations of course -- and aiding unemployment?

Understanding the reasons justifying this apparent paradox is beyond me.

Greece's sovereign debt. Season 4: the final season?

F O R S A L E --- S P E C I A L D E A L S, P L E A S E L O O K I N S I D E!

The Greek government's idea / promise / ad lib / to raise Euro 50 million by selling off real assets, constitutes a partial solution, short-term, to the country's cash flow imbalances. So we found a one-off source of working capital.

But the question still remains: what's the plan, longer term?

How is Greece's sovereign debt to reduce to workable levels? Where is the money to come from -- other than from friends and neighbours?

In 2010 Greece saw its economy reduce by 6.6% in (very) real terms.

The tangible added-value produced in Greece is not very high and 60% of the country's GDP is in the services sector with a ominous-looking 67% of that, accounted for by the Greek Public Sector.

Shipping is one sector where Greeks -- i.e. Greek individual shipowners -- are global leaders. But some companies are switching flags... following Louis Cruises move to Malta, no major cruise ship operator is left under the Greek flag.




It is time to say: time for global brainstorming!

Greece's sovereign debt, Act 4, Episode 1

In which Greek government officials inform the IMF-EU reps of its intent to market Public Assets to raise Euro 50 mill; said reps announce this inter alia in their customary press conference;
following the press conference, Mr Horseshoe, the Greek government spokesman (yes, there is one!), pretends to strongly resent this reference to a garden sale of Public Assets; the IMF-EU Rep Office agrees and normality is restored amidst cheering from Greek television buyers for the free Weekend content.

And all is well.

Meanwhile, a building belonging to the Greek state in Brussels, has been on the market for some time now; it has not attracted any firm interest -- for a very tangible reason: there is no interlocutor i.e. no physical person to speak to about buying the building!
Mr Geoff Papandreou, the US-Swedish prime minister of Greece is constantly changing the boss of the Greek Agency for the Exploitation of National Assets; no-one else is empowered to sell the building...

In case you were interested in it...

Siemens Greece, redux: should Greece have only paid lip service?

The (ill)famed Mr Christoforakos, so famed for allegedly having authorised, or failed to stop, kickbacks from the corporation he headed to Greek government officials, politicians and sundry, was not a king.

But, in his own way, he was important: he was, in the wake of the 2nd millenium, one of Siemens Corporation's Regional Directors. In this respect, he was also that Corporation's youngest Director.

This is no small deal. Mr Christoforakos' region was large indeed and comprised much of the old Soviet Union -- a promising (if troubled) market if there ever was one!

Add to this that the (ill)famed Mr Christoforakos is a Greek-German citizen of Greek origin.

In all cynicism: doesn't all of the above indicate that it's good to have one of our own at the head of one of the world's largest corporations? Or, that's what I have thought if I were in the Greek politicians' shoes, politicians worried more about their country's and countrymen's fate than about their personal finances...

Let's say... "you won government contracts on the strength of generous kickbacks -- how about you make a major investment in Greece? And we'll all extol your Corp's as well as your personal virtues!"

Isn't this delectably politically incorrect!!!