Anemic growth
Yet again, it has been made obviously clear – as seen in the latest report by the Dianeosis think tank on behalf of the Foundation for Economic and Industrial Research (IOBE) – that the only thing Greece’s coalition government knows how to do is impose taxes everywhere. While it has proved unable to crack down on tax evasion, 20 percent of taxpayers still cover 80 percent of tax revenues. At the same time, seven out of 10 self-employed professionals and nine in 10 farmers continue to declare incomes of less than 9,000 euros a year. Greece is now among the countries of the European Union with the highest tax rates and is third in the list of member-states with highest social security contributions. Instead of slashing public spending, reducing the wasteful public sector and rapidly proceeding with a privatization program, the country’s first leftist-led government sought to protect its own and place the tax burden on the private sector – and all this with the tolerance of Greece’s creditors. This is why Greek citizens’ overdue tax payments amount to more than 100 billion euros and why thousands of businesses and self-employed professionals have moved their headquarters to Cyprus or Bulgaria. This is also why a negligible number of foreign companies are willing to invest in Greece and why the so-called “springboard” for growth cited by Prime Minister Alexis Tsipras has proven rusty and incapable of extracting the Greek economy from its predicament. After being on the brink of growth at the end of 2014, the delusion of the SYRIZA-led government plunged the country into recession again in 2015 and 2016, before returning to anemic growth of 1.5 percent of GDP in 2017 when the average figure in the EU was 2.3 percent. Unfortunately, in 2018, and despite the anticipated record number of tourist arrivals, the economy’s growth rate does not appear likely to exceed 2 percent, with the projection for 2019 at 1 percent. The expectations that a new climate of confidence in Greece will emerge on international markets – along with a parallel surge in investments and foreign capital flows – after the country exits its third bailout program in August remain low.