An article by
JOHN STATHIS.*
The
reformation and salvation of the Greek economy is not the responsibility of the
EC, ECB and IMF “troika”, but the duty of Greeks.
Our country is nowadays situated on perhaps the most
critical turning point of its modern economic history as the failed political policies
of the recent decades have literally led it to the brink of bankruptcy.
Greece is
today a toy in the hands of its creditors and unfortunately enslaved under the
stipulations placed upon it by the prevailing global economic centers.
The harsh
truth is that in Greece the private economic sector has not gone bankrupt. The
state is the one going bankrupt and in its futile attempt to save itself, it
enforces unbearable taxes, “permanent temporary contributions”, reductions in
salaries and pensions, essentially pushing the economy to a slow death.
Greece has
drowned from the unreasonable, uncritical and exorbitant borrowing done by our
politicians, whose one and only target was to buy off the citizens’ vote giving
in return outrageous provisions and assigning them to various positions, not
having society’s best interest at heart, but in order to ensure their own
reelection and the vain enjoyment of the pleasures of power.
The
unprecedented outburst of crime rates, public disgrace of politicians,
explosion of unemployment, economic and social pauperization of a large
percentage of the citizens, the uncontrollable immigration, permanent protests
that paralyze the center of Athens, ever increasing “padlocks” on business
doors as well as the downward spiral of fiscal numbers, are all clear
indicators that things are not going well. The control of developments is
completely lost.
Unfortunately
the political system has not realized the dead end towards which it is leading
us. The apathetic and irresponsible posture, combined with its tragic
inadequacy in dealing with developments, point to its complete lack of
awareness of the consequences that await the country.
Let’s dwell
more specifically on the fiscal sector, which is the actual heart of the
problem of the Greek economy.
The policy
followed, with the constant and ineffective increase of taxes as well as the
utter failure to put an end to tax evasion, does not under any circumstances
result in increasing the public revenue. Quite the contrary, it leads to the
necrosis of the market and the collapse of public revenue.
The fiscal
policy of the last two years exhausts itself trying to increase revenue using a
mixture of threats and facilitations. Outrageous increases of tax rates, strict
penalties combined with settlements and facilitations already have obvious
negative results. The state budget has already fallen short of its targets , while the future projection of economic numbers and
fiscal performance seems extremely alarming. The
increase of tax rates does not mean corresponding increase in tax income.
If someone combines the afore mentioned faulty policy with the utter
disintegration of the tax collection mechanism, then the future appears
nightmarish. All measures, even the most
suitable ones, when exaggerated bring opposing results to the ones expected.
Unfortunately
the tool of tax politics in the hands of wizard’s apprentices has nowadays been
transformed into a mechanism that robs law-abiding citizens of their fortune
and incomes, with the sole purpose of sustaining gigantic counterproductive
public structures and bureaucracies.
Our opinion
is, always referring to modern international theory and practice, that taxing
in order to be productive should be simple, just and low. Albeit, the exact
opposite from what is happening today in our country, where taxing is
complicated, unjust and,naturally,very high, resulting in the sad governmental
performances.
The problem
with the Greek economy is not just its income; not just the tax evasion; not
just the black economy. In our view the most significant problems are state
expenditures and extravagances. The state should enforce as little tax as
possible, be it direct or indirect, and of course drastically reduce its
expenditures.
In order to
avoid bankruptcy and utter social failure, there is only one option…the one
that will enforce dramatic cutbacks both to the size of the state and public
expenditures – squandering. In order for this country to get on a development
course, there has got to be a neat and effective state that functions and
serves the taxed citizen.
Greece
supports perhaps one of the biggest public sectors globally, while contrary to
that, the standards of the services offered are tragic to nonexistent.
Generally, in
our country, it needs to be made clear that the public sector was created to
serve society in the most efficient and effective way. One could state that,
apart from exceptions, the public sector in our country is probably a laid back
and safe employer of privileged citizens with political connections.
Today, the
Greek economy faces an amalgamation of high debt, large deficit and extremely
low competitiveness. The combination of the aforementioned is to blame for the
fact that our economy cannot borrow reasonably nor can it enter a course of
development. The persistent, stable and systematic dealing with the factors
mentioned above will enable the creation of the prerequisites needed to exit
the deep recession.
Our country
could achieve relatively high development rates under the circumstance that it
would radically improve its competitiveness. Something that, unfortunately,
does not seem as being achieved. The new economic model that Greece needs, means
completely abandoning the excessive consumption and turning towards savings and
investments. It means walking away from the logic of statism and turning to
business initiative and competition. It means reinforcing the export
orientation of the economy. Without a doubt, the paying off of the debt could
be realized by exporting more than importing.
Bankruptcy
and catastrophe could be avoided and the country could reenter a course of
development, provided that significant economic reformations take place
immediately and consistently. Nevertheless, no one should be under the delusion
that we could shortly and painlessly return to the previous situation or even
one that resembles it. Unfortunately we must forget, once and for all, the distorted
model of development that has driven us to this crisis; Meaning the irrational and senseless consumption that has been based on
the abundance of easy loans from the banking system. Unfortunately this was a
model that satisfied the unreasonable consumerism of the present, at the
expense of the future.
In order to achieve
the reformations that will point the way in the right direction, major social
consent is required, something that appears to be absent. One could also add
that a large percentage of Greeks is deeply troubled about whether we will
overcome the crisis and, most important, is unaware of the way all that is
being enforced will contribute to reaching the goal. Patience and tolerance
have probably run out.
The situation
is extremely grave and there doesn’t seem to be an acknowledgement of the
dead-end our country is being led to. Today the Greek public sector has
collapsed. The public administration is paralyzed.
An urgent
readjustment of policies and a radical change of mentality are required. The
leadership of the country needs to move forward with sweeping changes on all
levels. With daring and courage, with imagination and determination. There is a
dire need to replace populism with new leaderships that will have vision,
know-how, patience, orientation and most of all a plan, in order for Greece to
re-obtain high rates of development, which will allow it to elude this
murderous crisis.
And for all
this there is significant support; The Greek people, who have realized the
criticalness of the situation and have shown a unique attitude of
responsibility. They know that they cannot expect much from the political
system anymore, however they have proven to support the right initiatives and
strategies. No matter where they come from. As long as they exist…
*John Stathis was born in 1969 in Ioannina .
He studied business administration in Athens , with postgraduate studies in the field of Banking Management and Marketing , by attending universities G.Washington University and Middlesex University
He is a graduate of the special departments , state administration and leadership as well as tax policy and administration of the School of Public Administration , John Kennedy School of Government , Harvard University , USA University of Stanford
He started his career in the Latsis group of companies in 1989 and in particular in the shipping company ARGONAFTIS and then switched to EUROMERCHANT BANK (EUROBANK), where he remained for fifteen years , evolving to higher administrative and operational positions of responsibility in the area of Retail Banking
He continued his career in EMPORIKI BANK (COMMERCIAL BANK OF GREECE) as sales manager .
Next stop was the Ministry of Economy and Finance , where he served as a senior executive with political responsibility in the field of taxation and customs mechanism . During his tenure he trained in issues of economic and organized crime at the US DEPARTMENT OF TREASURY, the IRS CRIMINAL INVESTIGATION and in customs and actions against trafficking and smuggling in the Italian financial police , GUARDIA di FINANZA.
To 2008 he returned to the private sector as a project manager of MARFIN INVESTMENT GROUP (MIG) having the responsibility as CEO of RADIO KORASIDIS . Today , John operates as a business consultant .
His writings are published in Greek newspapers and magazines , while his financial analysis , are presented in prestigious international publications in Greece
He has traveled extensively to many countries in Europe and America
He is currently Executive Vice President of the Greek Association of CFOs.
John Stathis has three sons and a daughter and lives in Athens
