There's a lot of wealth in Greece, and very little tax collection. With some outrageous percentage of the workforce on the government payroll, that creates a real 'doughnut hole', both culturally and fiscally.
Instead of dealing with the real problems, like governmental corruption and trade unions, the government chose to live on borrowed money. The wealthy (and/or productive) parts of the society turned toward an underground economy life. One can only assume a great deal of wealth has been off-shored, to a stable place like Switzerland, where the government is prohibited from living beyond its means.
From the New York Times:
Various studies have concluded that Greece’s shadow economy represented 20 to 30 percent of its gross domestic product. Friedrich Schneider, the chairman of the economics department at Johannes Kepler University of Linz, studies Europe’s shadow economies; he said that Greece’s was at 25 percent last year and estimated that it would rise to 25.2 percent in 2010. For comparison, the United States’ was put at 7.8 percent.
Hmmmm....the 7.8% figure seems low, from observation of life in these parts.
The entire article is an interesting read, demonstrating how the economy expresses the virtues and vices of the underlying culture.
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