The match is ready to drop
A large part of Greek society (combining various indicators and statistics, one can estimate it’s approximately a third of it) is having difficulty making ends meet. If in previous years poverty was linked to unemployment, today the “strong” Greek economy is massively producing the newly poor – people who are poor or penniless even though they have a job. The poverty and social exclusion indicators are in the deep red.
The situation tends to become explosive, as destitution faces the daily, unabashed, excessive consumption amid rampant corruption, while the meager purchasing power of salaried employees (due to the tacit abolition of collective bargaining agreements by powerful employers) is further undermined through the disintegration of the health system, the existing degradation of public education at all its levels and the lack of basic infrastructure.
Should/can something be done?
The government needs to stop the redistribution of income that has been taking place in recent years at the expense of labor and in favor of profiteering, and to initiate a reverse redistribution.
The main pillar in this process is tax policy. Drastically reducing the VAT rates on food and some basic necessities, increasing the taxation of profits and in particular those distributed (dividends), and generally increasing the taxation of wealth and large incomes is one way of doing it. It is not even a matter of ideological and political positioning.
The senses of injustice and anger are already leaving their political mark with the disintegration of the country’s party system
See what is happening in the rest of Europe:
In the United Kingdom, the Conservatives ran away from the black hole they created in the country’s finances by calling an election – somewhat like the New Democracy government did in 2009. How does Rachel Reeves, the country’s first female chancellor of the exchequer, plan to deal with the problem? “Those with the broadest shoulders will be bearing the largest burden,” she said last week. Taxes will not increase on working people but on the rich.
But isn’t she worried that the rich will flee for a tax-friendly country, she was asked. “If you make Britain your home, you should pay your taxes here; and under this government you will,” she replied categorically, indicating that the matter has been examined and the government has decided after consultation.
France is frightened by its public debt, which has reached about 110% of the country’s GDP (by the way, ours is at 158% of GDP and, if we are lucky, will drop to 131% after a decade). “The French economy is holding up, but our public debt is colossal. It would be both cynical and fatal not to see it, say it and recognize it,” said French Finance Minister Antoine Armand, of the center-right Barnier government.
To this end, among other things, he announced additional taxes of 12 billion euros on the 440 largest profitable French companies, an additional €2 billion in taxes on the 65,000 richest families, and €800 million in taxes on shipping – that is, on groups that have seen the biggest windfall profits in history over the last two years.
And in neighboring Italy, Finance Minister Giancarlo Giorgetti has announced plans to impose a new €3.5 billion tax on banks and insurance companies, temporarily suspend the deferred tax regime for banks, and increase tax on bonuses with stock options, to give money to public hospitals and improve their services to those who need them – the weakest.
In Greece, the collapse of the unions and the inadequacy of the opposition parties allows state-supported interests to believe that “everything is under control.” This is delusional.
The senses of injustice and anger are already leaving their political mark with the disintegration of the country’s party system (main opposition SYRIZA was first to collapse from within as the most vulnerable, while New Democracy seems to be next) and the steady rise of the parties banking on absurdity and hatred. If the direction and pace of public affairs do not change, clashes within society (with all that historically accompanies them) may just be a matter of time.
The floor is flooded with gasoline, waiting for the fool to light a cigarette and throw the match.
