Why Greece is Failing

A temple in an advanced state of disrepair due to Greek economic woes.

A temple in an advanced state of disrepair due to Greek economic woes.

Special Report: Greece’s triangle of power | Reuters.

This article illustrates one of the  reasons why Greece continues to fail at implementing its troika reform program.

In a normal country, a law is passed by the legislature and implemented by the executive branch’s bureaucracy. In Greece, there is a difference. The bureaucracy seems free to ignore the law or at least change it in some manner by offering exemptions. Most of this corruption is never brought to light, because the Greek media is owned by the very same people who manage to obtain exemptions from the new laws.

In the latest case, the Greek Parliament passed a law adding a property tax to electricity bills. While regular people paid the tax, favored companies were issued exemptions from the new levy. This scam was only brought to light by the international press.

Any reform passed by Parliament will fail, because the bureaucracy changes the substantive terms of the new law. The property levy failed to raise as much revenue as anticipated because large companies received exemptions and private citizens  ceased paying once they realized what was occurring.

Next year should bring more of the same for Greece. Budget cuts and underwhelming taxes revenues make a fourth bailout likely.

2 thoughts on “Why Greece is Failing

    • I would have agreed with you a few months ago. Now, I believe whether or not to help Greece is a simple cost-benefits analysis that is just as cynical.

      As long as it is cheaper to keep Greece in the Eurozone than allowing it to default and exit, the FANG countries will continue stringing it along no matter the consequences to the Greek economy.

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