ELSTAT, Andreas Georgiou --- And A Slap In The Face!

What would be a good definition of a 'slap in the face'? Well, if you happen to be a current or former associate of ELSTAT and if you are still convinced that Andreas Georgiou conspired against Greece and reported inflated deficit numbers to Eurostat in order to bring unnecessary pain upon Greece, here is a recipe: Write to the American Statistical Association, provide them with evidence and ask them for a ruling that "the Greek public debt and deficit burdens have been unjustifiably exaggerated, that they have actually been created, instead of describing the 2009 reality."

When the American Statistical Association then answers that "the evidence confirms exactly the opposite (of the above allegation). This and the many other troubling statements in your letter raise significant questions about the ethics and integrity of your allegations", well, then you know what a true slap in the face is.

Below is the text of the response by the American Statistical Association and here is a tweet about it.

From: Wasserstein, Ronald L.
Sent: Sunday, December 3, 2017 5:35 PM
To: 'Zoe Georganta' <zoe.georganta@gmail.com> Subject: your letter of October 27, 2017
Dr. Georganta and Dr. Logothetis,
Your letter of October 27, 2017, has been carefully reviewed by many people, including the members of the ASA Board of Directors. No evidence that you have presented or that we can find confirms your basic premise that "the Greek public debt and deficit burdens have been unjustifiably exaggerated, that they have actually been created, instead of describing the 2009 reality." Rather, the evidence confirms exactly the opposite. This and the many other troubling statements in your letter raise significant questions about the ethics and integrity of your allegations.
Sincerely,
Ronald L. Wasserstein
Executive Director
American Statistical Association
Promoting the Practice and Profession of Statistics® 

Betting On A Greek Recovery? (cont'd)

An anonymous reader of my blog who makes time and again very thoughtful comments on my articles has made the below comment on my recent article "Betting on A Greek Recovery?"


Observing from outside or even at close range, you really cannot distinguish what is really going on. Overall of course Greece is bouncing back. Both on ground level and country level. This though does not necessary mean we still do not have the crisis still in hand. Nor will the wounds of the severe crisis be closed for many years. We will still have strict measures for many years to come and one from the inside can take that people have simply accepted them. Of course there is a sense of vengeance always boiling underneath.

On ground floor there are positive views in both the economy of black (less now) and white markets. Investment has never stopped and is showing itself and its only speeding up. This is evident with small business, middle sized and large corporations. Of course there are many large projects that will greatly help to the rebound of the country. Ports, airports, roadways, Trainose, energy, ellinikos and many more. All this will help the ground level economy to bounce back.

It will come when Tsipras leaves. He will have done all the dirty work and ND will come. Not that strict policies will not remain but I believe it will signal the rebound. I believe Tsipras is trying to show this rebound as so he can be reelected, but he needs to go.

Every year and as time goes by, the transportation of goods and works is growing on a large scale as you see the ships in the port. I see truck queues lined up everywhere for importing and exporting. Whichever it is, it is not necessarily bad or good, the positive you should take from this is that there is movement. For example, right now there is a great shortage of trucks for transportation of goods. This more so in the spring and summer periods when our agricultural exports also kick in.

We will rebound and I am sure of this now. Will Greek mentality return? To some small extent yes, but not the classic. We have changed like a chameleon changes its color.

In addition to the above you now start to see movement of people. In the deep crisis nobody would dare risk to leave their job. Now people are changing jobs at an increased rate.

For the average Greek though things are still hard. Not much room for black money considering the need to pay with cards as to acquire tax breaks for income taxes.

Overall, we are okay. If investment comes and the large projects move forward, Greece will be a force to be reckoned with.

Betting On A Greek Recovery?

Having just finished our regular 3-month autumn stay in Greece, it's a good time to reflect on the impressions I could gather and what may be in store for Greece until we return there next spring. Obviously, the all-important questions are: Has Greece really turned the corner (economically, that is)? Are we perhaps witnessing the beginning of an accelerated turn-around? In short: has the time come to bet on a Greek recovery?

There have been different views in recent months. Some, like the reputable American investor Kyle Bass, predicted that "investors are getting ready to pour billions back into the Greek economy". Others considered talk about Greek economic recovery as "fake news in action". Today, it was Bloomberg who headlined an article "Betting on the Greek Recovery."

What stands out is that all commentators focus on the macro-side of things: Will Greece successfully exit the program? Will Greece be able to return to markets? Will yields on Greek bonds decline further? Are bank shares rising? Do banks report profits? Etc.

To be sure, the hard facts still tell a rather miserable story:

* the government continues to tax the living daylights out of Greeks, the result being that unpaid taxes (about 100 BEUR!) seem to rise faster than taxes collected. To put this into perspective: GDP is currently running at about 170-180 BEUR which means that unpaid taxes amount to substantially more than half of GDP!
* while some progress seems to have been made with non-performing loans, NPL still amount to almost half of all loans in the Greek banking sector. By all normal standards, a banking sector which has almost half its loans in the non-performing category is a defunct banking sector kept alive by artificial means (is there any other banking sector in the world which comes even close to having half of its loans in the non-performing category?).
* Greeks exposed to the risk of poverty are still said to be close to 3 million.
* while unemployment figures have come down of late, monthly incomes at the minimum wage level (or even below) seem to have become standard for those who find a new job.
* the government's conduct with regard to foreign investment (Ellenikon, Eldorado) makes one wonder why any investor would get ready to 'pour billions' back into the Greek economy.
* Etc., etc.

And yet...

A visitor like myself observes significant changes. Already during our spring stay I had written last May that "The gut says: 'Greece is on the rebound!'" Today, the gut says that even more emphatically. I emphasize: it's the gut which is talking, not the brain. If I ran into depressed Greeks a couple of years ago, I now ran into cheerful ones. If every Greek I talked to a couple of years ago talked about the crisis, was frustrated about the Troika, about foreigners in general and about Schäuble in particular, this time it seemed like the crisis didn't matter. Yes, it was still there but so what?, the feeling seemed to be. A bit like a boxer who was badly knocked down but not out and saved by the bell. And after the break he felt the juices returning and went on to fight well again, albeit with a lot of bruises.

As I write this, I look out the window at the Thessaloniki bay where a number of huge freighters are waiting to enter the docks. Not too long ago,  I was happy when I saw 3 or 4 ships and I don't even remember seeing large freighters. Now, there is hardly a day when there are not at least 10 ships, most of them large freighters, and they all seem to be heavy-loaded. Now, I have no idea whether this relates to Greek exports/imports or whether it is just goods in transit towards the Balkans and further up. But my point is: the economic activity in the Thessaloniki harbor has increased substantially!

Thessaloniki has returned to its vibrating temperament where life is pulsating. But in the villages, too, I noticed a return of spirits. And jobs, too. My wife's 2 nephews are both in the construction industry: one in earth moving and building materials and the other one is a project engineer. As late as two years ago, their families had to live off their savings. Now both have rather good order books. Some village tavernas which we frequent seemed to be close to shut-down not too long ago and now I have seen them fully booked. Albeit only on Sundays but there had been Sundays in the past were we were the only customers.

In short, wherever I looked I got the feeling that money was being spent again. Whether official or black money, I don't know.

All of these observations, be they the professional ones or my gut feelings, have one thing in common: they don't address the question whether things have really changed in Greece; whether the economy has really become reformed; has Greece really become a good place to do business? The original intention had been to use the shock of the crisis to 'build a modern and prosperous Greece: a Greece characterised by economic opportunity and social equity, and served by an efficient administration with a strong public service ethos' (EU Task Force). Is Greece now on its way towards becoming such a country?

As I listened to my Greek friends over the last 3 months, I have never heard from anyone a comment to the extent that something had really changed significantly in the last years. It was much more common to be told, with a twinkle in the eye, that "Greece will never change!" Yes, the budget was balanced, no doubt a sensational result but actually a controller's result (raise taxes and cut costs). From true leadership one would have expected new visions, new narratives, new plans, etc. The general business model pursued in Greece does not seem to have changed much. Greece still exports far too little and imports products which it should make at home (including agricultural products and food stuffs). And Greece continues to hold the questionable distinctions of ranking at the bottom in the EU as regards attractiveness as a place to do business and the top as regards perceived corruption.

So my bottom line at this point is this: yes, a turn-around is happening and it may even gather some speed. Nevertheless, however large the turn-around will be, it is unlikely to be the result of a reformed and improved economic framework. Instead, it seems to be driven by catch-up needs and by a generally higher level of optimism. The well-known political slogan is 'never waste a good crisis!' As far as Greece is concerned, I am not sure that the terrible crisis of the last years has been put to good use.

US Ambassador Chastizes Privatization Of Thessaloniki Port!

Back in April of this year, right after the so-called privatization of the port of Thessaloniki was announced, I wrote a very critical article about the transaction ("Thessaloniki's private equity port"). My conclusion at the time was that "The Deutsche Invest consortium seems to be the prototype of the foreign investor that Greece should stay away from."

For reasons unknown to me, this subject never really made the headlines. Nevermind that at issue was/is Greece's second largest port and gateway to South-Eastern Europe; nevermind that SYRIZA had for years blocked privatization of this port; nevermind that Greece's conduct versus foreign investors is a much-observed subject --- the deal was declared successful and it was closed. End of story.

So much more was I surprised when no one less than the American ambassador to Greece now raised the subject publicly. In a speech at the American-Hellenic Chamber of Commerce on December 4, Ambassador Geoffrey R. Pyatt made the following statement: "We have seen the difficulties privatization faces in Greece, as in the Thessaloniki port, where it’s unclear who the private investors actually are and where their money comes from."

When an American ambassador says something like the above publicly in his host country about certain policies of his host country, one can undoubtedly consider it a bombshell. It will be interesting to see if this bombshell now makes the headlines or not.

PS: a Greek friend of mine gave me the following, albeit not very sophisticated, analysis of the transaction: "Someone needs to know something about running a port (the French), someone needs to figure out who needs to be bribed (Savvidis) and someone needs to provide the money for the bribes (the Germans)."

Parliament's Budget Office Surprises!

When the head of Parliament's independent Budget Office states publicly that the social dividend planned by the SYRIZA government is counter-productive to much needed economic growth in the country, that should raise some eyebrows.

Several years ago, when it first became apparent that, some day in the foreseeable future, Greece might have a primary surplus again, I had made several suggestions as to what the primary surplus should be sued for ("Beware of the primary surplus!").

The first phase in a financial rescue is generally a phase where a borrower still needs fresh money in order to stay in business. Corrective measures have already been taken but it will still take a while until they show results. During this phase, the country still runs a primary deficit even though substantial reforms have already been made. That phase lasted in Greece until about 2013.

Phase II is where the deficit gradually turns into a surplus, initially rather small but growing steadily. However, doubts still remain whether that surplus can be sustained over time. What happens to the surplus during this time is of crucial importance.

Phase III is where everything is back to normal.

Greece now seems to be reaching the peak of phase II: from January-September 2017, the general government accounts registered a consolidated primary surplus of 5,3 BEUR, roughly the same as the year before and, according to the government, substantially above the target. It seems rather likely that, for the year as a whole, Greece's primary surplus will exceed 6 BEUR.

That is a sensitive number because Greece's creditors will undoubtedly remember that Greece's interest expense is currently running at about 5,5 BEUR annually (at current, subsidized interest rates). Put differently, Greece - for the first time since the crisis - could pay ALL of its interest out of the primary surplus this year. One would expect that creditors will put pressure on that.

However, Greece is still in phase II and the crucial question is how the primary surplus can best be applied in order to promote sustainable growth. Paying interest is certainly not conducive to promoting domestic growth. Will the social dividend be?

Without having any special insights into the subject matter, I would tend to agree with the Budget Office. A social dividend is generally for one-time consumption and that is it. The thought comes to mind that the Greek state owes substantial monies to domestic economic agents (unpaid bills, non-refunded taxes, etc.).

One would think that if the Greek state used a billion or two of its surplus to pay past-due bills with a special focus on small and medium sized businesses, that ought to have an extremely beneficial effect on the economy. That should also be in the interest of foreign creditors and domestic lenders because when small and medium sized businesses improve their performance, lending risks also decline.

One wonders why, with such huge monies flowing into Greece, why the state would have such high arrears in the first place. I seem to recall that parts of recent tranches were explicitly earmarked for the purpose of reducing arrears but the numbers don't show that this has happened.

The Incredible Shrinkage Of The Greek Banking Sector

The Greek banking sector has undergone massive changes since the crisis culminated with the First Memorandum in the spring of 2010. The tables below show how the aggregated assets, liabilities and equity of all Greek banks (excluding the Bank of Greece) developed between June 2015 and September 2017. It should be noted that these are aggregated (and not consolidated) figures, i. e. there may be significant overstatements of assets and liabilities. The equity should not be overstated. Source of the figures is the Bank of Greece.

AGGREGATED ASSETS
	Jun 2015	Sep 2017		Change
	(BEUR)	(BEUR)		(BEUR)
Loans to banks	116,4	15,0		-101,4	-87%
Loans to non-banks	281,0	195,4		-85,6	-30%
Debt securities	78,2	41,1		-37,1	-47%
Equities	18,7	8,6		-10,1	-54%
Remaining assets	50,4	55,6		5,2	10%
	--------	--------		--------	--------
Total assets	544,7	315,7		-229,0	-42%

Total assets declined by 42%! To say that total assets in the Greek banking sector were cut in half would be an exaggeration, but not by much! 229 BEUR of assets went away!

The largest decline was in interbank loans which declined by 101 BEUR. This is an understandable development: Greek banks had been active in the international interbank market (most of these interbank loans were to foreign banks) and as liquidity became tight, the Greek banks ran down that portfolio. Still, assuming that interbank lending was profitable for the Greek banks, the near-elimination of that portfolio must have impacted the banks' earnings potential.

The bulk of the loan portfolio of Greek banks represents loans to Greek non-banks (i. e. regular private and corporate customers). This segment accounted for 72 BEUR of the decline in loans. Loans can decline for one out of three reasons: (1) because they are repaid; (2) because they are sold off to investors; or (3) because they are charged off. I would be surprised if a very large portion of the decline in loans was due to repayments because loan repayments typically slow down in a crisis.

The only category which increased during this period was 'remaining assets' but the BoG does not provide any details about that.

AGGREGATED LIABILITIES & EQUITY
	Jun 2015	Sep 2017		Change
	(BEUR)	(BEUR)		(BEUR)
Debt to Bank of Greece	94,3	41,7		-52,6	-56%
Debt to other banks	75,8	18,9		-56,9	-75%
Deposits	294,9	156,7		-138,2	-47%
Securities issued	15,0	2,1		-12,9	-86%
Other liabilities	26,8	21,8		-5,0	-19%
Capital & Reserves	37,9	74,5		36,6	97%
	--------	--------		--------	--------
Total liabilities & equity	544,7	315,7		-229,0	-42%

The decline in the debt due to the Bank of Greece presumably represents the reduced dependance on ECB funding. A deposit decline of 138 BEUR, or -47%, speaks for itself. Of that decline, 94 BEUR were in the category of regular domestic deposits and another 19 BEUR were in the category of deposits from foreign countries.

As regards positive news, capital & reserves in the Greek banking sector almost doubled from 38 BEUR to 75 BEUR. When total assets shrink and equity increases, it has great beneficial impacts on the leverage in the system.

Venezuela As An Example?

Venezuela is now doing what Greece should have done in early 2010: meet with all its creditors to discuss a restructuring of the country's debt. On one hand, Venezuela is in a worse position than Greece was in then because Venezuela does not have the benefit of belonging to a common currency zone where the major players have to fear that Venezuela's default might bring the common currency down. On the other hand, Venezuela is in a better position: since the creditors know that there is no fall-back, they might be more interested in securing a deal.

The most critical, if not the holy principle of a sovereign debt restructuring is (or rather: was until the Greek restructuring) that 'risk takers must remain risk carriers'. If, say, Deutsche Bank had an exposure to Greece before the restructuring of, say, 100, it will end up with an exposure of 100 after the restructuring. Put differently, no creditor can reduce his risk exposure at the expense of someone else (ultimately at the expense of tax payers).

In fact, the principle of 'risk takers must remain risk carriers' should be quite acceptable to creditors. Normally when they go into a debt restructuring, they eventually come out of it with only 75 on 100, or even less. In case of an official bankruptcy proceeding, it's 20 on 100, at the most. So coming out of the sovereign debt rescheduling with 100 on a 100 is quite comfortable.

The only thing which should be required of existing creditors, once 'risk takers remain risk carriers', is that they are flexible as regards interest rates and maturities. This really is not asking much when compared to a private debt restructuring where creditors might lose much (or all) of their principal claims.

What is the incentive for creditors to go along with a debt restructuring like the above? It is the hope that, after the restructuring, their assets of 100 will be of better quality than their asset of 100 was before the restructuring. How can that be accomplished?

This is where official financial institutions (ECB, IMF) and governments become involved. Someone will have to negotiate with the debtor country sounder financial policies so that its debt becomes of better quality, and that can only be other governments and/or official institutions. Someone will have to coordinate the new terms and conditions with the existing creditors. Someone will have to come up with Fresh Money which the debt country normally requires to finance budget deficits and only other governments and/or official institutions can be expected to provide that. Finally, someone will have to exert open or hidden pressure on all creditors so that they 'play ball', and that can only be their governments and/or official financial institutions.

The Greek debt restructuring was not only a significant departure from rules governing sovereign debt crises until that time but is was also extremely unfair and inequitable to everyone involved except the original creditors. Tax payers bailed out private creditors and to an important degree, EZ tax payers bailed out the creditors of non-EZ countries. For example: China, the largest contributor to Greece's current account deficit in the 2000s, did not have to make any official contribution to Greece's restructuring and, presumably, there were also Chinese banks which profited from the bail-out. Not to mention UK and US banks which were pleased by-standers profiting from the Greek bail-out without having to share in its cost.

Life Ain't Fair To Unknown Passengers

This commentary from the Ekathimerini ("The unknown passenger's silent resistance" by Nikos Kostandaras) brilliantly captures a theme which I have tried to bring across on many occasions in this blog. The theme of a society where the clever operators built their economic well-being on the hard work and clean living of the 'unknown passengers'. The Greeks whom I met in Germany when I lived there during the 1970s were mostly guestworkers and akin to the 'unknown passengers'. When my wife talks about the Greeks in the small village where she had grown up, her family, their neighbors and friends, the villagers in general, she talks about Greeks akin to the 'unknown passengers'.

Those 'unknown passengers' rarely hit the headlines but one does come across them in day-to-day life. When foreigners rave about Greece and the Greeks, they do so with the 'unknown passengers' in mind; Greeks whom Kostandaras describes beautifully as follows:

"These are the people – and the children of the people – who in the golden age of our recent past were up at dawn, in long queues at bus stops, on their way to work when the nightclubs and bouzouki joints were still full of more privileged revelers. These are the people who would pay for permits to build a home or fix the family home in the village, while others would build illegally on public land; the people who made sacrifices in order to raise children, to pay their taxes and loans, to meet all their obligations. The country was built on their labor, while others set up their political and economic confidence tricks. With the workers’ acquiescence others cultivated the belief that anyone could do whatever they liked, with impunity."

"Life ain't fair" is an expression which one hears frequently in business life. Life certainly has not been fair to the 'unknown passengers'.

Emmanuel Macron, the EU and --- Greece

French President Emmanuel Macron is the political star of the day. Many of those who, not long ago, predicted that the EU would eventually share the experience of the former USSR are now elated that there will soon be a strong EU on par as a power with the USA. Macron's wish list is remarkable:

I can see how countries like Greece will become enthusiastic when they read goals like "a bigger EU budget to fund investment and cushion economic shocks", "a guaranteed minimum wage adopted to each country", etc. My recommendation to Greece is: Beware of French bearing gifts!

In 2013, the provocative German author Henryk M. Border published a book titled "Die letzten Tage Europas: Wie wir eine gute Idee vernichten" ("The last days of the EU: How we are destroying a good idea"). Most of the causes behind anti-EU populism of today are explained in detail in this book, such as: a central bureaucratic authority, mostly self-appointed and with questionable democratic legitimacy; a central arrogance over concerns of nation states; a super-efficient central authority when it comes to minor issues and incompetent with larger issues; etc.

Anti-EU populists will not be carried away by new visions if these are not based on an honest and fair assessment of where the EU has been and where it is now; what has gone wrong along the way; which major mistakes need to be corrected and why. Anti-EU populists would remind Macron that it was a French president, the legendary Charles de Gaulle who had materially shaped European integration in his time, who was completely opposed to any European federalism and who created, in 1961, the vision of a "Europe of Nations". A vision of cooperation between governments with absolutely no loss of sovereignty and no supranational institutions. The standard answer that "today's challenges are too big for any one nation to solve on its own", however correct, will not be satisfactory to anti-EU populists. Anti-EU populists will question Macron what happened to one of the EU's major principles, the "subsidiarity principle".

Macron is the prototype product of French elitism, a truly outstanding product, for that matter. Ever since de Gaulle, French elitism has put French interests before any kind of European idealism. De Gaulle's conception of Europe was as a tool to improve France, i. e. an integrated Europe must be beneficial to France. Macron has yet to make the case that even though he is a product of French elitism, he has discarded the major elements which have shaped that elitism over decades. At this point, one cannot but share the suspicion that Macron is the most capable French elitist the country has ever produced and that he beautifully disguises French national interests behind a passionate pro-EU facade.

Macron's first major industrial policy decision was to nationalize France's biggest shipyard at St.-Nazaire rather than allow it to pass into Italian ownership. This was a classic de Gaulle move and not the move of a European visionary who wants to take the first opportunity to prove that he is willing to walk his talk. All the justifications about this only being a temporary move to allow time for a better deal and agreement to emerge notwithstanding.

Macron seems to have realized that de Gaulle's vision of France's being the supreme power in any European integration is no longer workable. He seems willing and intent to share that role with Germany. But what about the other 25 post-Brexit EU countries? Will those countries be happy to see a French-German cooperation treaty or will they feel threatened by it?

First calculations have suggested that the full implementation of Macron's wish list will require additional funding by member states in the order of 3-4% of national GDPs. Those are simply guestimates and should not be taken seriously, but still: 3-4% of GDP would translate into 5-6 BEUR for Greece at present, roughly the same amount which Greece currently receives from the EU as subsidies. Will Greece be prepared to re-allocate its EU subsidies to finance a vision of the EU?

In 2016, the controversial EU agricultural policy (CAP) amounted to slightly over 50 BEUR or 42% of the EU's budget (or more than the complete implementation of Macron's wish list according to first guestimates). The true test of an institution or policy is whether one would one would rationally decide to re-instal it if, for some reason, it disappeared overnight. Whether the CAP would pass that test is rather questionable. A true revolutionary proposal would have been for Macron to propose the elimination of CAP and to use the proceeds to finance his vision of the EU.

One of the great strengths of German federalism is that the federal state distributes its federal offices and institutions throughout its 16 states. A true revolutionary proposal would have been for Macron to propose something similar for the EU. Virtually every EU member could house an EU institution and the EU would no longer be equated with "Brussels".

The charity "My Europe 2100" presents a concise summary about Charles de Gaulle. Some excepts:

"De Gaulle played a major role in its implementation (Treaty of Rome) because he saw the European common market as a positive measure for the French economy. Similarly, he strongly defended the Common Agricultural Policy (CAP), implemented in 1962. He saw it as a very effective tool to modernize French agriculture. These subsidies to promote agriculture in member States, financed by all members of the EEC, benefited France particularly because of its enormous agricultural sector. Moreover, it was in this period that the modernization of the French agriculture began: mechanization and intensive farming were starting to materialize, but subsidies were necessary. All in all, the CAP served the interests of France, and that is why de Gaulle greatly favored it. This goes to show how he put French interests before any kind of European idealism. De Gaulle’s conception of Europe as a tool to improve France widely influenced the country’s position. For example, the massive rejection of European institutions and their decisions in France nowadays can be linked to the idea that being part of an integrated Europe must be beneficial to the country: if its benefits are not immediately apparent, then European integration must be given up or completely rethought ... De Gaulle was opposed to any kind of loss of sovereignty for France. He wanted it to be one of the great powers, and for that, independence was essential. This is why he advertised his conception of a “Europe of nations”, in which national governments would closely negotiate, but would never be forced to anything ...

Overall, Charles de Gaulle’s influence on Europe has been tremendous thanks to his popularity. His conviction that France was a great nation was, and still is, very popular in the country. As a result, his ideas about foreign policy remain highly respected and widely shared within France’s public and political elite."

Macron has yet to prove that while he may be the product of French elitism, he no longer shares the traditional parameters of that elitism. That while he is a child of that elitism, he has discarded its spirit. That his vision for Europe is not a disguise for pursuing French national interests.

A first step would be to revoke the nationalization of the shipyard at St.-Naziere.

WEF Competitiveness Report: Greece Ranked #87 out of #137

The World Economic Forum has come out with its Global Competitiveness Report 2017-2018. Greece ranks #87 out of #137 (#86 in the previous report). Ahead of Greece are peer countries like Portugal (#42), Slovenia (#48), Bulgaria (#49), Slovakia (#59), Romania (#68), Albania (#75), Montenegro (#77) and Serbia (#78). Also ahead of Greece are non-peer countries like Marocco, Ukraine, Guatemala or Botswana.

The 5 most problematic factors for doing business in Greece were listed as:

Tax rates
Inefficient government bureaucracy
Tax regulations
Policy instability
Government instability

Inflation was listed as the least problematic factor.

Greek Land Registration Picking Up Steam Or Falling Behind?

I had first looked into the matter of Greek land registration in May of 2013 with the following article:

One reason why foreigners shy away from investing in Greece! - May 27, 2013

Then, 2 years ago, things seemed to get moving with Greek land registration and I wrote the following articles:

Cadastral registration under way in Greece! - October 14, 2015
Delayed Land Register (Cadastre) A "National Shame"? - October 19, 2015
The Mysteries Of Greek Land Registration - November 1, 2015

Since then, I had assumed that the project was progressing satisfactorily. Until I read this article in the German Handelsblatt. To summarize its key points:

* cadastral registration is complete for only 10.000 square Km, or 7,6% of Greece's land surface.
* only 26,4% of all ownership titles have so far been properly recorded.
* in the last 4 years, when allegedly land registration was a top priority, properly recorded ownership titles have only increased vom 20,1% to 26,4% of the total, i. e. not very substantial progress.

The source of this information is a letter which EU Commissioner Pierre Moscovici sent to a member of the European Parliament. Moscovici concludes the letter on a positive note: he expresses confidence that cadastral registry will be completed by the end of 2020, the original target date. Moscovici assures us that the date is manageable and that all efforts are being undertaken to meet the target.

As I concluded one of my earlier articles: I believe it when I see it.

Manufacturing Sector Starts Growing!

The latest report by IHS Markit about the Greek manufacturing sector has got to be the best news in ages! It says that:

* the Greek manufacturing sector growth, i. e. the Purchasing Managers Index (PMI), climbed to the highest level since August of 2008!
* it was bolstered by BOTH domestic and foreign demand!
* and the rate of jobs growth was the sharpest in over 17-1/2 years!

I am reminded of an article which a wrote 4 months ago, titled "The Gut Says: 'Greece Is On The Rebound!'"

Macron's Agenda For Visit To Greece

French President Emmanuel Macron will travel to Athens next month to send a message to fellow euro zone leaders about the need to strengthen the currency union, at a time when Greece is emerging from years of economic crisis, French officials said. “The idea is for France to be on Greece’s side to help this recovery,” an adviser to Macron said.

France has been on Greece's side for quite some time now. To be exact: since October 23, 2015, when the French Finance Minister Michel Sapin and his Greek counterpart Euclid Tsakalotos, in the presence of French President Francois Hollande and Greek Prime Minister Alexis Tsipras, signed a "Protocol between the Hellenic Republic and the French Republic For a Partnership for reforms in the Hellenic Republic." My reaction to this protocol at the time was that "France will modernize Greece."

Athens will certainly be a fitting place to announce the need for reforms of the Eurozone and of the EU altogether. Athens is an even more fitting place to make an interim check of all the reforms which Greece agreed with France to make only two years ago. The focus of the protocol was on the following areas:

Central administration reform
Tax reform
Privatization and public asset management

The protocol promised that "actions and relevant support, as well as clear a timetable of initiatives, will be defined and agreed between the Greek Authorities and the Reform Partner." The first step would be to check whether this was done. The second step would be to check compliance with the timetable of initiatives. Actually, the protocol promised that "the achievements of this Protocol will be reported twice a year to the two governments, by two senior civil servants, designated respectively by Greece and France."

If the above promises were kept in the last two years, they certainly received little or no attention in the media. Macron would provide an excellent public service if he brought the public up to date.

SYRIZA's Definition Of Communism

Thanks to an article in KeepTalkingGreece, I now have an entirely new definition of what Communism was:

It seems to me that the Greek Justice Minister Stavros Kontonis, when making the above remark, overlooked the fact that it was Communism which destroyed the ideological trend coming out of Prague.

Voluntary Austerity?

The Ministry of Finance reported that for the period January-July 2017, the State's primary surplus (not to be confused with the General Government's primary surplus which includes the social security and local administrations and which is the basis for memoranda compliance) amounted to 3.053 MEUR. That was 12% higher than in the same period of 2016 AND 46% higher (!!!) than the 2.098 MEUR which had been the target. Hurrah?

Not really. State revenues were 2% below 2016 so that one would generally have expected a lower primary surplus. The opposite being the case, the answer is obvious: a significant limitation in expenses, i. e. austerity.

In 2016, State expenditures had been 29.755 MEUR. The target for 2017 had provided for an increase to 30.232 MEUR. In actual fact, State expenditures in 2017 were 'only' 28.663 MEUR, i. e. significantly below target and even lower than in the previous year.

Where did the State keep its expenditures below target? Grants to hospitals -199 MEUR, social solidarity income -99 MEUR, family allowances -60 MEUR, earmarked revenues -302 MEUR and public investments -522 MEUR.

By all considerations, the Greek State must be flush with cash: the year 2016 had closed with a budget surplus of 1,3 BEUR; there have been disbursements under the program; fresh funds were raised from markets; the State is not reducing arrears; etc.

In view of the above, it is difficult to understand why the State would voluntarily limit expenditures in such critical areas as hospitals, social solidarity and public investments below the levels provided for in the agreements with creditors. Voluntary austerity at times when creditors are being accused of imposing austerity?

Here are the figures published by the Ministry of Finance and here is the Ministry's commentary.

Andreas Georgiou - A Never-Ending Story

It is in the nature of some situations that a final verdict will never be accepted, regardless how often a final verdict is rendered. The debate about who killed JFK will never be closed. Even if the Special Counsel were to clear President Trump of all charges of a possible Russian collusion, the debate about that would go on.

It looks like the case of Andreas Georgiou has a fair chance of becoming one of those situations where a final verdict will never be accepted, regardless how often a verdict is rendered. I am personally contributing to this phenomenon by writing another article about the case when in actual fact I thought that my previous, very recent, article had closed the case from my point of view.

I re-open the case because I have just read two very interesting articles on the Georgiou case. In "The case of Georgiou: When the Greek justice system is cast aside", the author, Minas Konstantinou, reaches the following conclusion:

"Whatever the outcome, the case of the former ELSTAT chief has already irrevocably exposed all parties, both inside and outside of Greece: the current SYRIZA -ANEL government and the preceding ones who for years accepted the ultimate humiliation of public demands; the Justice Department that permits such flagrant intervention into the country’s internal affairs as a prerequisite for receiving payments towards loan financing, the European and American partners, who can no longer conceal the terms on which their game is being played internationally, on the backs of democracy and justice. And of course, there are the major Greek and foreign media, who are yet again proving blind to the bigger, anti-democratic picture." (n. b.: the emphasis is mine)

In "The whole truth and nothing but the truth", Nick Malkoutzis reaches a far shorter conclusion:

"Anyone who believes that it is imperative for a country’s economic data to be grounded in reality rather than fantasy has understood that the case against the former head of the Hellenic Statistical Authority (ELSTAT), Andreas Georgiou, is a farce."

I think these two articles serve as evidence that the debate about Georgiou is likely to go on for a very, very long time. However, I wish to add a somewhat different perspective on the case.

According to Wikipedia, Andreas Georgiou was born and raised in Greece and completed his secondary education there. Thereafter, he went abroad, first to study and then to work. From 1989 - 2010, he worked for the IMF in Washington. In 2010, he returned to Athens to take up the job as Head of ELSTAT. At that point, Georgiou had spent about 30 of his then 50 years outside of Greece, his entire adulthood.

I myself had left my home country Austria at age 18, after completing secondary education. I went abroad first to study and then to work. When I returned to Austria, I had spent 23 of my 41 years outside my country of origin. My passport still showed Austria as my nationality but initially I thought I had landed on a different planet. Books have been written about the experiences of 'internationalists' returning to their country of origin. Andreas Georgiou clearly was an internationalist who had returned to his country of origin in 2010.

The 'returner' runs into suspicion from all sides, disguised as alleged curiosity. Whatever the new professional environment, the returner's qualifications are scrutinized by his superiors, peers and subordinates. Was he really successful abroad? Is he really competent? What does he know about the local business environment? Etc., etc. Certainly at the peer level, there tends to be very high suspicion coupled with behind-the-back maneuvers.

Georgiou's case was slightly different from mine. He did not return to Greece to start a new life there. Instead, he was 'brought in' by other outsiders to run a domestic agency and bring it up to speed, which agency before had been accused of incompetent, if not criminal conduct. It is clear that in a situation like that, the newcomer will not be given a chance, not to mention a fair chance, by the existing management. On the contrary, the existing management - now publicly degraded for incompetence and, possibly, criminal conduct - will now watch every step of the newcomer to see if and when they can entrap him.

Georgiou had another thing working against him: he was/is not a statistician by training and profession. Yes, he had been deputy division chief in the IMF Statistics Department but that is no match for professional statisticians who have been in that business all their lives, like apparently members of Georgiou's management team were.

For one person to come in and turn a situation around by himself is a mission impossible. One needs to have a support structure. Apparently, the only support structure which Georgiou had was Eurostat, his functional superiors. He seems to have gotten strong support from Eurostat in his work, which is only one more reason for his domestic resisters to watch even more closely every step he takes.

It is impossible for a manager in Georgiou's position/situation to always be 100% perfect. There will be comments which, in retrospect, should not have been made; there will be emails which, in retrospect, should not have been written; there will be other things which can always be misinterpreted by people of ill intent. And, clearly, Georgiou's professional loyalty undoubtedly went to Eurostat and not to his board of directors. In such circumstances, anyone who wants to build a case against Georgiou will find something which appears to justify such a case.

Georgiou has now been sentenced to two years in prison with three years of parole for breach of duty, on the charge that he had failed properly to inform the administrative committee of ELSTAT about the transmission of data regarding the 2009 deficit. That was the maximum penalty. No mitigating circumstances were considered. His lawyer considers the verdict a 'victory' because it concerns only a small misdemeanor. Georgiou's lawyer is wrong. A small misdemeanor or not, being convicted is being convicted. From there it is only a short step for others to later claim "would you believe a convicted person?"

Georgiou's supporters are making a mistake by portraying him as Mr. Perfect who never made any mistake. Whenever then mistakes are uncovered, however small, they will be used to show that Georgiou's supporters were/are wrong. The way Georgiou's job performance should be appraised is as follows: he was brought to ELSTAT to report correct statistics to Eurostat; it is Eurostat who defines what correct statistics are; and Eurostat has confirmed unequivocally that Georgiou's reported correct statistics. Full stop.

Minas Konstantinou focuses on all the alleged scandals which came to light following Georgiou's first indictment back in 2013. He puts particular blame on Greece's European and American partners.

Nick Malkoutzis focuses on all the scandals which made the above alleged scandals possible in the first place. Malkoutzis rightfully points to the previous ND and PASOK governments for having led Greece into the calamity which exploded in 2010. And he also points to EU authorities who cannot have been so naive as to think that the statistics submitted by Greece were correct.

Only these 3 institutions can put the Georgiou matter to rest by coming out and stating their responsibilities.

Of Course It Was Georgiu's Fault!

"The reason I find the ELSTAT case so interesting and important is that in my view it’s a test case for the willingness of the Greek political class to face the misdeeds of the past, the corruption and all the things that hinder prosperity in Greece. In addition, a country without reliable statistics can’t really claim to be a modern and accountable country.

As it is now, Greece is heading towards a political trial where those who fixed the fraud are being hounded and punished, not the perpetrators. As long as the charges against Georgiou and his colleagues are upheld it is clear that the forces who want to keep Greece as it was – weakened by corruption and unhealthy politics – are still ruling. That isn’t only worrying for Greece but for Europe as a whole."

This comes from my article "The ELSTAT Case And A Messenger By Name Of Andreas Georgiu". Nothing more needs to be said.

Greece's New (Euro)Bond: Volume Too Low, Yield Too High

According to media reports, Greece successfully sold 3 BEUR new 5-year bonds which carried an interest rate of 4,375%. The bonds were offered at a small discount, thereby raising the yield to 4,620%. The issue was oversubscribed by a margin of 2:1.

Reviewing the media reports, one cannot help but get the impression that a major effort is being made to describe the issue as a great success. Was it?

Yes, the yield was slightly lower than the 4,95% yield which Greece achieved the last time it sold 5-year bonds (4,95% back in 2014). The government's conclusion is obvious: 2-1/2 years of SYRIZA governance increased Greece's creditworthiness substantially!

The yield of 4,62% is more or less the same as the yield on 5-year Icelandic paper. From that standpoint, one could argue that it is a fair yield because Iceland, too, had to overcome a major financial disaster and rebuild its creditworthiness. However, that comparison would not be appropriate for one reason: Iceland is not a Eurozone-country! As a result, Iceland does not operate with the implied support of the Eurozone.

Greece, on the other hand, operates with the implied support of the Eurozone. Even though that support was frequently severely tested since 2010, it seems fairly obvious by now that the Eurozone is not going to walk away from Greece. From that standpoint, one could consider Greece's new bonds as a Eurobond of sorts.

Germany's 5-year yield is currently a negative 0,16%. Is a yield difference of nearly 5% between Germany and Greece really justified when one considers Greece as a Eurozone risk of sorts? Definitely not! Are there any obvious reasons why the markets would not consider Greece as a Eurozone risk of sorts? Hardly! Particularly the events of 2015 have shown that the Eurozone simply does not have the backbone to walk away from Greece, even when people like Yanis Varoufakis literally defy the Eurozone to do just that.

So why was the new bond issue at such a high yield not oversubscribed by a ratio of at least 20:1? At a time when it is difficult to find First World countries yielding above 1%, why wasn't there a run on a sort of Eurozone risk Greek bond yielding 4,62%?

Less than 2 months a ago, the Greek industrial group Mytilineos raised 5-year debt at a yield of 3,1%. Why would the Greek state have to pay so much more than a Greek private borrower?

A few weeks ago, someone invited proposals on twitter at what yield Greece would issue 5-year bonds. I submitted "below 3%", thinking Greek sovereign risk would yield slightly less than Greek private risk. That's what logic would have suggested to me. That's what I would have considered a success.

The markets did not behave on the basis of my logic. There was something which the markets obviously did not like very much about this bond. Was it the timing? Or was it perhaps more doubts about the Eurozone's implied support than I would have?

It will remain the Greek government's secret why they think that borrowing from the markets at 4,62% is so much more attractive than borrowing from the Eurozone at near-zero rates. Perhaps they wanted to surprise the world with a smashing success.

A smashing success this was not!

Some Interesting Debt Issues

This article from the Ekathimerini suggests that the Yanis Varoufakis who had just become Finance Minister was quite different from the Yanis Varoufakis who had been seduced by fame only a few months later. The article quotes a document which Greece had submitted at the February 16 Eurogroup meeting (February of 2015, that is). In it, views were expressed by the Greek side which were reasonable and appropriate. Here is an excerpt:

"In this document, the debt-to-GDP ratio is calculated in terms of net present value and estimated at 135 percent. The document dating from just three weeks after the elections – and repeatedly citing the head of the European Stability Mechanism, Klaus Regling – states in a special appendix that: “The misunderstanding regarding Greece's solvency is owed to the fact that the blunt 175 percent debt-to-GDP number does not fully describe the actual burden of public debt over the Greek economy.” The borrowing conditions of the European Financial Stability Facility (EFSF) as well as Greek Loan Facility (GLF) loans (the latter being the bilateral arrangements of the first bailout) are characterized as highly concessionary."

I should add that in my communications with Varoufakis prior to his becoming Finance Minister, we had exchanged views along the same lines and I felt confident that he would pursue negotiations along these lines. Well, somewhere along the lines there was an abrupt personality change!

On a separate front, Bloomberg reported that the reason why Greece had to shelve the idea of returning to the markets with a new bond issue was that it would have exceeded the debt ceiling set by the IMF. Presumably, there will be a bit of an uproar about the fact that the IMF would restrict, prohibit and/or disable Greece from borrowing in international markets.

The uproar would not be justified. It is only natural that the creditors would put a ceiling on total debt which their borrower can accumulate. According to Bloomberg, Greece's creditors do not allow the country to increase its indebtedness beyond the levels set out in the program. The program provides for enough new funding to refinance maturing debt. If Greece can secure funding for the refinancing of maturing debt from third party sources, the creditors would be more than happy but then they would reduce their commitments in a corresponding amount. 

Social Justice: Greece Ranks #28 Out Of 28 EU Countries!

The German Bertelsmann Stiftung surveyed all EU countries for the level of social justice. The 6 criteria measured were: poverty, education, labor market, health service, intergenerational solidarity and civil cohesion & non-discrimination.

Greece ranks #28 out of 28 EU countries.

The Spanish "El Mundo" On The Blind Arrogance Of Yanis Varoufakis

Below is an absolutely outstanding analysis of Yanis Varoufakis and his accomplishments as Finance Minister of Greece from the Spanish "El Mundo". Regrettably, I cannot find an English translation.

Adults in the Room: The blind arrogance of Varoufakis

The 'Few' And The 'Many'

I would tend to agree with the following conclusion of this FT article:

"Of course, some Greeks are doing just fine. My motorcycle friend and I ended the evening dining in a packed rooftop taverna in a middle-class suburb. The richest Athenians have had “a nice crisis”, says Paris Mantzavras of brokerage Pantelakis Securities. They just take care not to flash their cash like before. Alexander Kitroeff, historian of Greece at Haverford College in the US, sees the country becoming almost Central American: the once solid lower-middle-class of pensioners, lower civil servants and small shopkeepers is disappearing, leaving only rich and poor. Ten years ago, Greece imagined it had become northern Italy, but it has since discovered it’s more like Bulgaria. Try shedding your fantasies to accept that."

During the 4-5 months we spend in Greece every year, we are moving mostly in the circles of the 'few'. And most of them still have a very good life, even if they don't flash it as much as before.

But we obviously also see the 'many' and whenever I see them (or read about them), I get the sense that fairness is not an outstanding value in Greek society.

DiEM25: "All Men Will Become Brothers!"

Extraordinary developments are taking place at DiEM25, Yanis Varoufakis' Democracy in Europe Movement 2025: a writer, media theorist and media activist by the name of Franco Berardi informed Varoufakis by letter that he would resign from DiEM25's Advisory Panel and Varoufakis answered that DiEM25 would not accept his resignation. The final outcome of this battle is not yet known.

Berardi's letter of resignation is quite extraordinary and I reproduce it below:


Dear Yanis, dear friends and comrades of the Democracy in Europe Movement 25,

After the shameful decisions of the Paris meeting of Minniti Collomb de Maziere it’s time to understand that there is something flawed in our project of re-establishing democracy in Europe: this possibility does not exist.

Democratic Europe is an oxymoron, as Europe is the heart of financial dictatorship in the world. Peaceful Europe is an oxymoron, as Europe is the core of war, racism and aggressiveness. We have trusted that Europe could overcome its history of violence, but now it’s time to acknowledge the truth:

Europe is nothing but nationalism, colonialism, capitalism and fascism.

During the Second World War not many protested against deportation, segregation, torture and extermination of Jews, Roma, communist militants and homosexuals. People had no information about the extermination.

Now we are daily acquainted about what is happening all around the Mediterranean basin, we know how deadly is the effect of the European neglect and of the refusal to take responsibility for the migration wave that is a direct result of the wars provoked by two centuries of colonialism.

The Archipelago of Infamy is spreading all around the Mediterranean Sea.

Europeans are building concentration camps on their own territory, and they pay their Gauleiter of Turkey, Libya, Egypt and Israeli to do the dirty job on the coast of the Mediterranean Sea, where salted water has replaced ZyklonB.

To stop the migratory Euro-Nazism is going to build enormous extermination camps. The non-governmental organisations guilty of rescuing people from the sea will be contained, downsized, criminalised, repressed.

The externalisation of the European borders means extermination.

Extermination is the word that defines the historical mission of Europe.

Nazism is the only political form that corresponds to the soul of the European people.

In the last twenty-five years (since when, in February 1991, a ship loaded with 26.000 Albanians entered the port of Brindisi) we have known that the great migration had began. Two paths were possible at that point.

Opening its borders, starting a global distribution of resources, investing its wealth in a long lasting process of reception and integration of young people coming massively from the sea. This was the first path.

The second was to reject, to dissuade, to make almost impossible the easy journey from Northern Africa to the coasts of Spain Italy and Greece.

Europeans have chosen the second way, and they are daily drowning uncountable children and women and men.

Auschwitz on the beach.

With the exception of a minority of doctors, voluntary workers, activists and fishers, who now are accused of being the abetters of illegal migrants, the majority of the European population are refusing to deal with their own historical responsibility.

Therefore, I declare that I’m not European anymore. And I declare that I have never been European.

We have naively expected that an alliance of British murderers, French killers, Italian stranglers, he German slaughterers and Spanish slayers could give birth to a democratic peaceful friendly union. This pretence is over, and I’m sick of it.

Five centuries of colonialism, capitalism and nationalism have turned Europeans into the enemy of the human kind. May they be cursed forever! May Europeans be swept away by the storm they have generated, by the weapons they are building, by the fire they have ignited, by the hatred they have cultivated!

Because of the aforementioned reasons I must renounce the honour of being part of the Advisory Panel of DIEM25.


Many Marxists seem to have one thing in common: their readers/listeners get the impression that Marxists are in need of psychotherapy. What other conclusion can one derive from Berardi's above musings? 150 years after the first publication of "Das Kapital", a work which Marx originally called "that economic shit" in a letter to his friend and partner Engels, one gets the impression that people like Berardi are intent on making sure that Marx's initial assessment of his work remains valid.

Berardi solemnly declares that "I'm not European anymore. And I declare that I have never been European." Again, a trait which many if not most Marxists share: deplore the way things are but shy away from outlining specifically how "opening its borders, starting a global distribution of resources, investing its wealth in a long lasting process of reception and integration of young people coming massively from the sea" would work.

To simply sing that "all men will become brothers wherever your tender wing remains" just doesn't seem good enough.

Bail-Out Tranche Will Arrive On Monday... And Will Leave On Monday!

The heading of this article is a bit sarcastic. Of course not the entire 7,7 BEUR which Greece will receive on Monday will leave on Monday. A grand total of 800 MEUR will actually stay in the country, allegedly for the repayment of state arrears to suppliers and tax payers. At least that is the intention (or mandate) of the ESM. It might be an idea to check whether it actually gets done.

This routine of pushing the can down the road always reminds me of Argentina's Economy & Finance Minister in the early 1980s, Bernardo Grinspun. Grinspun was a totally unconventional minister who simply had no time for the games bankers play. The establishes rites of international finance (avoiding default, keeping the ball rolling, etc.) never really found a place in Grinspun's attention span.

The game was the same as the one now being played out with Greece: disburse new loans to pay off existing loans; make the disbursement into an escrow account which is beyond the country's control; make sure that none of the disbursed money bypasses the recipient banks and stays in the country.

In one meeting with foreign bankers which I attended, Grinspun said something like the following:

"Make an escrow account and run all your lending/repayment transactions through it. If you want to disburse new loans to repay yourselves maturing loans, fine with me. If you want to disburse new loans to pay yourselves interest, fine with me. Just don't bother me with it!"

Perhaps the Greek Finance Minister should take a page from Grinspun's book!

"Greeks Are Interested In The Eternal And Not The Contemporary!"

Below is an interesting exchange between two passionate commentators in this blog.


Statement
Anonymous can be rather annoying to listen to, but it is still useful. He expresses the opinions of many Greeks, the opinions they don't tell you to your face. It may not make you understand why, but it can make them more predictable to you, how they tick, what buttons to press.


Response by Anonymous
I wouldn't put it this way. As a general rule, we Greeks don't know what we want because if we don't then our enemies don't know either what we want and therefore they can not block us from having it. There is also the added benefit that if we "don't know what we want", then we can not be traitors to our country, like for an example an Austrian who knows exactly what his country wants and volunteers to tell us (at that point we can do some serious harm to Austria). We grumble continuously: nothing is satisfactory but yet again this is a nice method of passing information to each other without risking imprisonment or death (because we all grumble, therefore we are all guilty of the crime of being never satisfied and we can not be persecuted for such). This is where you foreigners fall into the trap. You hear Greeks complain about this, that and the other and you say "let's help these people fix it". But that's the thing: you can't fix it. Otherwise we lose this important protection of not displaying what our true intentions are and we become conquerable. And if we become conquerable then our fate is assimilation and extinction. The point is this: after thousands of years we are still here, we speak a language that is hard for a foreigner to understand and we don't want to have a Kratos (in other words an oppressive state) to dominate us which some of you gentlemen consider being the utmost good (a well-run state). That's why I have tried to warn you many times that you are wasting your time with us because whatever the cost we are determined to outlast you. This is our survival kit and has worked fine with the Romans, Byzantines and the Turks. Compare to the Greeks, Germans, Austrians and the like are simple footnotes - we know for sure how to outlast you.

So the bottom line question here is what exactly are you observing? We will never be clear as to what we really want; you will never understand what we really want and therefore you would be unable to give it to us. All you are going to get in the end is a lesson which I am not sure is applicable to your circumstances and daily lives.

Each Greek you speak to has many different opinions, none of which expose the core of our existence. They are a form of making conversation, or part of humanity if you wish.

None of our political parties are focused on our eternal strategy. They are only concerned about social trends and economics which are the most anti-Greek things because by definition Greeks are interested in the eternal and not the contemporary.

Greece: Overtaxed Or Undertaxed?

The Ekathimerini reports that Greeks work 203 days per year to pay taxes. Only the French and the Belgians have to work even more days only to pay taxes. No question about it: Greeks are extremely highly taxed.

Another way of looking at it would be the per capita government revenues, which are listed below for Eurozone countries:

	Revenues
	Per Capita
(EUR)
Luxembourg	40.186
Finland	21.092
Austria	19.728
Belgium	18.997
Netherlands	18.081
France	17.633
Germany	17.175
Ireland	15.336
Italy	13.012
Spain	9.081
Malta	8.940
Slovenia	8.407
Cyprus	8.277
Greece	7.956
Portugal	7.409
Estonia	6.464
Slovakia	5.951
Lithuania	4.674
Latvia	4.641

There, Greeks rank at the lower end of Eurozone countries. Does that mean that Greeks pay very low taxes? No! Because taxes per capita would have to be put in relation to income per capita.

While GDP is not the same as total taxable income, it is a yardstick by which to compare the national taxation burden:

	Revenues
	% of GDP
Finland	54,2%
France	53,0%
Belgium	50,8%
Greece	49,7%
Austria	49,5%
Italy	47,1%
Germany	45,0%
Netherlands	43,7%
Slovenia	43,6%
Luxembourg	42,7%
Portugal	41,4%
Estonia	40,7%
Slovakia	40,0%
Cyprus	39,2%
Spain	37,9%
Latvia	36,4%
Lithuania	34,5%
Ireland	27,5%

Here, Greece ranks among the top-5 of all Eurozone countries. Obviously, a very high level of taxation. But then, again, the question would what the tax payers get in return for the taxes they pay.

Bottom line: it is very difficult to answer the question who pays more or less taxes. But one thing seems to be certain about Greeks: those who pay taxes spend a very large amount of their income on taxes. And those who cheat with taxes spend a very small amount of their income on taxes.

All clear?