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On redesigning Greece January 24, 2012

Posted by proeconomia in Main, News on Greece, On the crisis, Opinion.
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Have a look at this website and the associated white paper (old news but I read it today) that the participants of the site have authored. Will it come as a surprise to you if the first item they tackle is called “zeroing in on tax evasion: an immediate imperative with fiscal and symbolic importance”. But, the thrust of their spear is directed not at those that perpetrate tax evasion but rather at “the system” of tax collection (the “system” is as, after all.) Although I agree with their suggestion for a complete overhauling of the tax system, the focus on the system alone comes as rather antithetical to the notion of “symbolic importance”, for more than one reasons. Here is the practical one: refraining to address the fact that tax evasion is perpetrated by specific productive sectors of the economy masks the implications of the proposed reforms, particularly those that relate to re-investing in Greece. The authors correctly point out that new investments are needed for Greece to move forward but the question is which kind of investments will (a) provide higher local employment, (b) produce competitive products with lower prices that will flow also to the domestic market, not just exported, (c) have earnings re-distribution to local shareholders or to new productive investment and (d) be directed to sectors with increasing returns (and these sectors ain’t only tourism and agriculture but many others, including education). Such investments will not be made for just their own sake but will have a multiplier effect from bringing forth positive externalities in the Greek economy.

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1. Constantina Kottaridi - January 24, 2012

Thank you for the imprtant info you are sharing with us.


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