The "Truth About Greece" and the Nth Bail Out...

...which is soon to be superseded by the N+1 loan or bail-out or call it whatever you like, whereby EU (& possibly IMF) dish out money so that Greece can continue to support what is arguably the most expensive and least productive Public Sector in modern history .

In a recent blog article (here for an overview), IMF's P. Thomsen claimed that the IMF is not the one asking for more austerity in Greece and imposing crippling taxes. That, on the contrary, Greece would benefit from a more investment-friendly programme; and that there is a lot of work to be done on the fiscal side.

So much is true. I cannot fault Thomsen on the above in the least. After all, it IS the Greek government that is imposing taxes and collecting on them. It is the Greek government that resorts to pensions cuts, cuts in medical cover and education, rather than reduce the Public Sector payroll and mismanagement.  

It is the Greek government that chooses to cut pensions to poverty level rather than work selectively: 7% of pensions in Greece account for 45% of the spending; it is the Greek government that is maintaining a largely unproductive public & semi-public sector at a crippling cost; it is the Greek government that is further raising taxes this year while talking about inspiring and supporting growth; it is the Greek government that is not reviewing the country's inflexible labour law that, for example, can cost an employer a hefty fine simply because someone called in sick and another employee came in the sick one's place (up to euro 10k per case); it is the Greek government that has no survival minimum, no unemployment benefits for +80% of unemployed; best case scenario, it takes 1 month to actually register a new company and many pages in hard copy; total taxes and contributions in case of profit distribution is 69-72%; a license to operate a cafe in a northern suburb of Athens costs between 1500 - 3000 euro in "consideration money". There are 1,5 million unemployed, 1.0 million public sector employees, municipal employees, contractors, and state-owned company employees of all sorts, and ~2.0 million employed in the private sector who are asked to create value to support the country; it is not working.

It is unfortunate that a country that has very low spending on unemployment benefits (minimum), no survival minimum, poor (and thereby inexpensive) medical services and underpaid medical personnel, very low educational spending, etc, should be incapable of balancing out its imbalances.


So, Thomsen is right - and one wonders how much he and his team actually know about what is really going on behind the scenes in Greece.

And when information such as the above comes to light, the government is quick to respond defensively, lashing out in all directions.
Then, the matter is quickly buried and life goes on: the next Troika / "institutions" evaluation, the negotiations, suppliers to the Public sector remain unpaid, etc etc, the evaluation goes through with agreement on "compromise measures" and another lump of money is released;
and thus the story goes!

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