Greece crisis continues: Driving to bankruptcy in a Merc

Chief among these is the intention for a more efficient tax collection system and more specifically, an intention to go after the big tax evaders. That’s fine, but the big fish, those with the foreign bank accounts, have long ago taken their money out of Greece. Hopefully, it will be possible to retrieve some of it but that will take years. As for the more middle and lower income groups, modernising the tax collection system is clearly something Greece has long needed. This requires records and factual evidence. In other words it requires restructuring present institutions and systems and a lengthy time period.

Time is something Greece does not have. Tax receipts are down. Capital is fleeing the country. Billions are due to be paid to the Eurogroup this month. An air of desperation permeates the Greek government’s recent actions, such as raiding pension funds to meet March payments.

From the outset, the Eurogroup strategy was to avoid being the bully of Greece. That was the game plan for the first round of negotiations. But no more.

A number of the Eurogroup members are losing patience. Having played the kind, understanding negotiator for the first round of negotiations, the gloves are now off. Don’t be fooled by Angela Merkel repeating over and over that “we want to keep Greece in the euro”. She is really preparing for just the opposite.

The Eurogroup will henceforth negotiate as what it really is – a banker dealing with a potentially delinquent borrower. Moreover, there is a distinct possibility that the banker may be reaching the point where he is willing to cut his losses and write the whole exercise off as a bad debt.