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.