Saturday, February 1, 2014

It's Taxing to be a Greek These Days.

It’s minus 15 Fahrenheit as I start to type this. Not sure what it will be when I finish. One thing’s for sure, I’m happy I don’t have to pay for heating oil at the prices Greek homeowners are paying.  But let’s not get into that.

Maybe we can talk about Greek taxes?  How’s this…it’s straight out of the Greek newspaper Ekathimerini.  According to a report presented on Tuesday by Greece’s Parliamentary Budget Office, Greek taxpayers are exhausted.  Duh.

The report “showed that Greece suffers from excessive taxation by comparing Greek rates with the European average: The highest value-added tax rate in Greece [called 'sales tax' in the US] stands at 23 percent…the top income tax bracket for enterprises has a 26 percent rate; [and] the top rate for taxpayers amounts to 46 percent.” All are higher than anywhere else in the EU or Eurozone."

Not surprisingly, “[t]he report adds that all tax increases since 2010 have created a major burden on households without the equivalent benefits for state coffers. This is attributed to tax evasion, the exhaustion of taxpaying capacity and the increase in unemployment.”

To put the increases in perspective, “The study highlights that income tax on salary workers and pensioners has increased seven-fold since 2010, while the tax that the self-employed will pay in 2014 will be up to nine times higher than in 2010. Property taxation has grown seven-fold within five years, as the total amount of tax real estate owners will pay this year will reach 3.5 billion euros, up from 500 million in 2009.”

And where, pray tell, will all the money come from for these folk to pay their taxes? 

Hark, I hear words of a primary budget surplus of around one billion euros. Wow, that sure sounds great. Relief is at hand, the bleeding is over, the country is back in balance…even though the surplus doesn’t take into account interest payments due the Troika (and a few other things). But let’s give credit where credit is due—uhh, credit is perhaps the wrong word in this context—it comes from a jump in tourism and is the first surplus in a decade. Bravo! 

But wait, the highest court in Greece just ruled that certain public sector pay cuts (involving emergency service workers and military) were unconstitutional!  The monies must be repaid.  And there are other groups lined up before that Supreme Court seeking similar relief.  Doesn’t sound like that surplus is going to be around for very long.

Correct me if I’m wrong, but weren’t those cuts made to meet the country’s agreement with the Troika in exchange for bailout funds?  If that money has to be repaid to the public workers, because their pay cuts aren’t constitutional, where is the government going to get the money to meet their obligations to the Troika? 

The Troika seems to be asking the same question, especially with the slow pace of privatization.  You can hear that old time Troika favorite tune beginning to play again across Athens. “You’re not going to get your money, you’re not going to get your money…unless you do these things, Ta da!”

Sitting off to the side in this tragic drama (once again) are the Greek taxpayers, wondering what else can their government take from them without giving back anything more than rhetoric.   If you want a sense of the man and woman on the street’s situation, think Mr. Bill.  Come on, you have to remember that iconic Saturday Night Live character.  In every segment he’d endure one indignity after another until finally ending up crushed or dismembered by an anonymous force as poor Mr. Bill moaned out his signature lamenting closing line…no wait, I’ll get to that later.

Bottom line, I don’t think many would argue that in perception, if not reality, most Greeks see their lives as deteriorating. That’s the obvious explanation for why the current majority party (NEW DEMOCRACY) in the three-party governing coalition trails the far left wing (SYRIZA) in the polls, and the far right (GOLDEN DAWN) ranks third.  The other two parties in the governing coalition aren’t even on the map.

One step forward, two steps back seems to be the new dance craze in government.

I’m not even getting into the escaped November 17 terrorist twist to all of this, and what that portends…there’s so much spin being applied to it that you need Dramamine just to try to follow it.

So, what’s the good news?  Oh, the quintessential Greek yogurt company FAGE successfully enforced its claim against the wildly popular CHOBANI brand from using the phrase “Greek yogurt,” claiming CHOBANI is really owned by Turks (and uses no Greek products).

No more Greek yo, Cho.

From the run of luck the Greeks have been having recently, CHOBANI—which is the number one selling yogurt in the US market—might just decide to start marketing itself as Turkish yogurt, and God knows where that might take the market.  As for FAGE, I’m sure they’re rejoicing in Luxembourg. You see, they moved their headquarters out of Greece in 2012—for tax reasons.

Like the wise man said, “Ohhhh nooooooooooooooo….”

PS.  For those of you desiring a bit spicier fare for your Saturday reading pleasure, here’s a link to a filmed interview I gave last Sunday to Charles Faddis, Senior Intelligence Editor of the Internet magazine AND. The subject: Terrorism and Corruption in Greece.




  1. YOWZA! 7-fold increase in real estate taxes??? That would take 60% of my income! 9-fold increase in self-employed taxes??? There goes the rest (and THEN some). I'd owe more in taxes in one year than I'd earn in two!

    Enjoyed the video-interview, you definitely LOOK the part of "English Professor!" :-)

  2. You got it, Everett. That's a real threat to Greece's stability: frustration by the middle and upper classes over greater taxation as the government's knee-jerk response to everything. It's one thing being asked to pay taxes so that your country might regain its footing, it's quite a different scenario when you see your life's work slipping away from you through endless taxation while those who never played by the rules, or have special interest protectors in government, continue to get by comparatively unscathed.

    I think the magazine labeled me "English" to make it more difficult for "them" to find me. That's also why I wore the disguise.:)

  3. Right. Jeff is English, Charles Faddis is a "former CIA operative," and I am Spartacus.

    Fun interview, though. Jeff's line about raisins and Greeks is dead perfect.

    1. Jolly, O. Always thought you looked like Kirk, Lenny.

  4. Yeah, it's a problem; people keep asking him for my autograph.

  5. Your pun "taxing" reminded me of the T-shirts one could buy in Singapore: "Singapore The Fine City." I thought "Greek yogurt" was a generic term now. Ben and Jerry makes a frozen Greek yogurt. So do other companies. When I can't get plain Greek yogurt in a supermarket, I buy the regular and let it drain overnight. What a big fuss over nothing! But what you describe as happening in Greece is hardly "nothing." Depressing picture.

    Barbara L.

  6. That's cute, Barbara, about Singapore and the tee shirt. I think it's right up there with "Beat Singapore before it beats you."

    The hassle over the use of the term "Greek" with yogurt seems only to have been asserted in the EU, as many US makers call their yogurt Greek and I doubt there's much of a case to make in the US. Otherwise, bye-bye Italian pasta and tomato sauce.

    As for good news in Greece, I'm expecting hyper-charged rhetoric in advance of the May 18 EU Parliamentary and local municipal elections, but a likely return to tourist normalcy for the summer. After all, tourism (not yogurt) is what drives Greece's economy.