What really went wrong in Greece?

Evan Liaras and Harris Mylonas, 11/20/11

CNN Editor’s Note: Evan Liaras is the Davis Post-Doctoral Fellow in European Studies at the Institute of European, Russian, and Eurasian Studies at George Washington University. Harris Mylonas is Assistant Professor of Political Science and International Affairs at George Washington University and Academy Scholar at the Harvard Academy for International and Area Studies.

After reading about the Greek debt crisis for over a year now, you might think you understand what it’s all about. You’re probably wrong. International media focus on how the Greek government and people spend their money. But an equally important problem is the inability of the Greek state to collect revenues.

The story constantly aired by various news outlets is simple enough. Greece, we are told, free-rode on the security offered by the rest of Europe to attract money from foreign investors, and then spent it lavishly on its bloated public sector. In case you don’t get it, BBC’s website has a recurring instructional slide show titled “What went wrong in Greece?” Apparently, Greece’s adoption of the euro “made it easier for the country to borrow money.... Greece went on a big, debt-funded spending spree, including paying for high-profile projects such as the 2004 Athens Olympics.”

This brief media lesson on Greek economics has proven very appealing to audiences abroad for two reasons. First, it rhymes with the stereotype of lazy Mediterranean people conning their hard-working North European partners and then shamelessly asking for a bailout. (Now that Italy may be heading the same way, there will be more of this coming.) It also resonates in the ears of the euro’s sworn opponents, above all in the UK.

Unfortunately, it is only half the story. Greek public debt as a percentage of GDP did not dramatically rise right after Greece joined the euro. Greek debt actually accumulated back in the 1980s and early 90s, years before Europe got its common currency. The size of the Greek public sector (as a percentage of GDP or share of the labor market) is around or even below average compared to the rest of Europe. Greece did try to spend its way out of the global recession in 2008-2009 and ran large deficits; but so did most other developed countries, including the UK and the U.S.

There are two sides of the public finance coin: expenditure and revenue. What is left out is that while Greek public spending and debt crept up, government revenue fell or remained constant in the years after Greece adopted the euro. Between 2001 and 2007 Greece’s average government revenues totaled 39.4% of GDP, whereas the EU average was 44.4%. Taxes are by far the largest component of government revenue. The issue is not unique to Greece. Declining tax revenues were observed in Ireland, Spain, and in the U.S. after the Bush tax cuts kicked in.

In Greece the culprit has been rampant tax evasion by corporations owing millions in taxes and self-employed professionals who can hide their earnings, unlike salaried employees and pensioners. Under international pressure to balance its budget, the outgoing Greek government axed salaries and pensions and slapped new taxes on the bulk of citizens who were not tax-delinquent. This only drove the country deeper into recession and insolvency, making it necessary for EU leaders to write off part of Greece’s debt in July and then again in October.

Whether the government is reluctant to tax the very wealthy (as in the U.S.) or lax in its duty to punish tax evasion (as in Greece), the results are similar. Revenues can’t keep up with expenditures and lenders become uneasy. Meanwhile, those who are taxed too leniently have an interest in shifting public attention towards cutting government spending. The bitter partisan quarrels in Washington and Athens lately have this much in common. Yet, this obvious point is conspicuously absent from reports on Greece in the English-speaking world.

There is no denying that Greece overspent on security for its Olympics - they were the first games after 9/11. There is also no denying that the Greek public sector is very inefficient. But this has to do with how the money is used. Deep cuts will not make an inefficient public sector better. Other reforms, however, just might. Finally, there is no denying that the euro deprived Greece of the flexibility to devaluate its currency. However, Greece’s revenue collection problem has been perennial and is unrelated to the euro. The first reforms Greece’s new government should focus on are the tax and judicial systems.

Casting the crisis ravaging Greece and closing in on Italy as a fundamental story of governments drunk on loans, doling out stacks of euros to their shortsighted citizens is a half-truth. It makes it easy to caricature on a national basis and to categorize Greeks, Italians, Germans or Americans as people who collectively live either within or beyond their means. It also masks the fact that there are differences within each country: Those who benefit the most from high-profile government contracts are the hardest ones to tax when the creditors come banging on your door.

The views expressed in this article are solely those of Evan Liaras and Harris Mylonas.

http://globalpublicsquare.blogs.cnn.com/2011/11/20/what-really-went-wrong-in-greece/

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請問【不論政客個人搞什麼權謀。民主社會總有一些理性和以大局為重的人會出來治理、善後、和/或替這些政客擦屁股】 


這段話 不是你這篇貼文的焦點之一嗎?  ------ 如果不是 我向你致歉!

我的論點是：

總有人會挺身而出，處理個別的政治危機。

希臘前(?)總理試圖用公投推卸自己的政治責任。其財政部部長和兩到四位國會議員冒著失去自己政治前途的風險，出來抵制這個賤招。

我之所以說民主社會，一來是在這種社會，人民是國家社會的擁有者，大家也就更關切它的發展，也對它的前途有責無旁貸的感覺，所謂的人民認為自己是stakeholder或利益均攤者。其二，民主社會有一定的機制和規則可循，人民行使政治權力不必冒著喪失生命的風險。

每個國家有不同的政情，不可能有完全相同的情境和應付方式出現。廣義來說，施明德先生當年的行為也是處理或減低陳水扁對台灣政局和社會的傷害。沒有他所領導紅衫群眾的民意表達，司法界和政治界的反應在2007年會是另一種形態。

他完成了你說的 "治理、善後、和/或替這些政客擦屁股"了嗎?

我認為適用只是人數多少而已

施明德先生是一個例子

不論政客個人搞什麼權謀。民主社會總有一些理性和以大局為重的人會出來治理、善後、和/或替這些政客擦屁股。