Greece is one step before collapse and the European Commission, the driving force of the supervisory team, named troika before and quartetto now, is insisting to impose policies which will only accelerate the collapse. With the new round of taxes legislated last weekend, Greeks will stop paying for anything.
The why is simple. Greece is earmarked as the black sheep of the European Union and must be sacrificed in order to save the other sheep before they change their colours. Greece is being sacrificed to save Spain, to start with. Indeed, having visited recently Barcelona, I understood that the message successfully passed to ordinary people is that if they vote for the non-conventional party Podemos of Pablo Inglesias the country will end up like Greece. A similar message is being passed to the Italians where Beppe Grillo with Movimento Cinque Stelle is dangerously rising. It is as simple as that.
However, the collapse of Greece may trigger other undesirable side effects. But the Commission cannot understand this because its thinking is linear. When you live isolated in a glass palace with diluted information, you see everything linear. Societies, the real world, however, are in an ever-evolving turbulent mode.
Most Greeks and many Europeans realise the serious responsibilities of the European Commission over the Greek catastrophe. The why and how is something for future historians to assess. At this moment, we will limit to present what could be practically done to avoid the social turmoil that is imminent and may prove more cataclysmic for Europe rather than for Greece.
President Jean-Claude Juncker is a sharp, intelligent and honest politician. However, thanks to the successful work of his communication and intelligence networks, he has been completely isolated from everyday reality. Indeed, if he knew the real situation in Greece and how possibly it is going to end, he would be approaching Greece in a different way. The beauty of this superb disorientation exercise is that when people are asked what the President thinks about it, the reply, vague yet concrete, always (off the record) is, “you know, he does not care very much” insinuating lies that make imaginations fly.
Greek society has entered into a deep stage of economic, but primarily psychological, depression where nobody cares about anything. Greeks do not care to produce, do not care to develop, do not care to work and do not care to do anything.
There are a few very efficient yet controversial and erratic provisions to take for Greece to return back to normal.
Stop the cartelisation of the Greek market. In Greece, everything is a cartel, we have said this in the past but repletio mater studiorum. It is enough to send a team of DG Competition to Greece and in one month’s time the cost of living will drop to half.
Everything in Greece (except rents) come under a cartel. Supermarkets, cement, construction materials, fresh milk, highways, transport services, fuel oil etc., etc., etc.
Here’s one example. The two airlines of the country merged with the blessings of the Commission in October 2013. The merger was initially refused but thanks to strong political pressures it was accepted (in reality Aegean purchased Olympic). However, certain conditions were set by the Commission for the approval to be given. The conditions were accepted and the merger was approved.
Since then, the Commission was never bothered to check if such conditions were ever met and more so that these were never made known to the public.
Today, a one-way ticket from Corfu to Athens (a 25-minute flight), usually is at €150. These days, there was a general strike in Greece which includes all civil servants and the crews of coastal car ferry services except, what a coincidence, air-controllers. During the strike (Corfu is an island) the Corfu-Athens tickets are selling for more than €200.
Another issue the Commission could intervene and resolve is contraband. Greece is losing every year billions of euros because of petrol smuggling. In Attica (the Athens region) alone, there are 1,200 illegal oil storage facilities. Among the money lost by the smuggling, there is a considerable amount of VAT. Therefore, OLAF could investigate and fix it.
There are two more situations to fix for Greece to easily revert to development. Both are blocked by the ideological limitations of the Greek government and the sensitivities of the Greek opposition. However, a Commission intervention could do it.
The Greek public sector is a bottomless barrel. No matter what, no government right, left or centre will ever dismiss civil servants in Greece. The reason is irrelevant. What the Commission could impose is a gradual reduction of the salaries budget. This is the only efficient way.
The most important step, however, will be the tacit deregulation of the private sector. It is obviously a blasphemy for any Greek politician yet it is the only way.
The Commission and the government are dreaming about big foreign investments in Greece which they think are on the way. Dream on! Nobody will ever come to invest in Greece under the present conditions when no Greek is investing in his own country. The rest is philosophy.
Small companies in Greece, entities with few, mostly family, employees can become the locomotors of re-launching the Greek economy. Presently, all these companies are dying. They produce little, if anything at all, and they pay no taxes or contributions because they have no income. At the same time there is a huge number of unemployed in Greece who, of course, pay neither taxes nor social security contributions.
Simply, the government should instruct by word-of-mouth all state authorities to stop controlling all companies with less than 10 employees for a decade, except for two elements. Not to employ personnel without a legal status for work and to pay regularly VAT. At the same time, abolish all documents necessary to do business. Abolish the debt worthiness certificate of the banks (Tiressias) and abolish all tax and social security certificates. Let small companies free, as it was in the early fifties. Let them produce without taxes and without social security contributions or any labour law obligation. After all, they will employ the unemployed, who will get something instead of the nothing they get now and they will pay VAT which now they do not because they do not produce. They will not pay income tax, but who cares since now they do not pay anyway and this will be the incentive to get them active again. And, once they will get some non-taxed income what will they do with it? It will stay in Greece and will be infused in the orthodox channels of the local economy as Switzerland has become too expensive to wash money.