Greece. Here we go again (Ekathimerini):
Prime Minister Antonis Samaras has approved a package of 11.5 billion euros in spending cuts presented to him by Finance Minister Yannis Stournaras on Tuesday evening … as well as 2 billion euros worth of new tax measures.
. . .
The package contains major cuts to public sector wages, pensions and benefits. It also includes an increase in the retirement age from 65 to 67.
Now, the retirement age increase is the only decent part of the package. The rest is simply big-government-on-the-cheap all over again, something that thrills Brussels and the IMF because it does nothing to actually reduce the size and scope of government. Greece has offered various versions of this for years.
Case in point (same link):
It does not, however, propose immediate mass sackings in the civil service, relying instead on retirements and limits on hirings to reduce numbers.
Really? Good luck with that.
Meanwhile, you may have noticed the plan includes a tax increase. Generally, tax increases are a terrible idea, but the Greeks have a talent for taking the worst choice among many bad ones (same link):
The tax measures include the scrapping of the tax-free threshold for self-employed and freelances, who notoriously declare much lower earnings than salaried professionals and are considered a major source of tax evasion.
That the Greek government, led by “conservative” Antonis Samaras would think to slap his country’s entrepreneurs with a tax increase is bad enough. The Ekatherimi swallows the populist nonsense about “tax evasion” without even considering the economic consequences reveals just how ignorant the entire Greek elite has become.
Greece needs to reduce regulations on businesses, fire bureaucrats (especially the regulators), and stop self-destructive tax increases. What they have chosen instead can be best described as faux-sterity.
Cross-posted to Virginia Virtucon
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