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Greek government could capsize as early as July
By Catholic Online (NEWS CONSORTIUM)
June 7th, 2012
Catholic Online (www.catholic.org)
June 7th, 2012
Catholic Online (www.catholic.org)
Greece is apparently on the short road to insolvency. Some analysts say
that the Greek government could be without funds as shortly as this
coming July. This had led to some grim predictions, with Athens
suspending the payment of salaries and pensions, and the halting of such
vital and necessary items such as fuel, pharmaceuticals and food.
In spite of Greece's recent bailouts, to the tune of 130 billion euros, or $161.7 billion, the nation faces a shortfall of 1.7 billion euros. An overwhelming recession and drastic budget cuts have left businesses and individuals with far less to pay taxes.
The International Monetary Fund, the European Central Bank and the European Commission, referred to as the troika, are withholding 1 billion euros in bailout money earmarked for government financing. The three are holding their collective breath to see if Greece's new leaders elected June 17 will honor the nation's commitments.
A key to Greece's recovery plan has been to collect more taxes from a population that has long engaged in tax avoidance. The government is owed 45 billion euros in back taxes, only a fraction of which will ever be recovered.
Tax collectors in Greece have a reputation akin to Wild West sheriffs set out clean up lawless jurisdictions. Nikos Maitos, a longtime official in Greece's financial crimes investigation unit, had recently trolled the recession-hit island of Naxos for tax evaders. A radio station on the island broadcast his license plate number to warn residents.
"One repercussion of the crisis is that people are harder to find," Maitos, declared. "And when you do find them, they don't have money."
Greek tax collectors, who likewise have suffered large pay cuts, have found that budget reductions make it hard to pay for the gasoline needed to reach their targets.
"After two and a half years of austerity, it's really a difficult time to bring in revenue," Harry Theoharis, a senior official in the Greek Finance Ministry says. "You can't keep flogging a dead horse."
Salaries and pensions in the private and the public sectors have been cut by up to 50 percent, leaving Greece 495 million euros short of its revenue targets in the four months ended in April, according to the Greek Finance Ministry. Consumers have curbed spending, leading thousands of taxpaying businesses to fail.
© 2012, Catholic Online. Distributed by NEWS CONSORTIUM.