by John Galt
May 11, 2012 05:15 ET
The nation and government of Greece is in total revolt from the street level to the civil service level now with bureaucrats at the Finance Ministry failing to engage in the Troika required tax collections per an article from the Greek newspaper Protothema. The lack of interest in engaging the citizenry for collection of these taxes, be it income, sales, or VAT indicates that the entire system is now in full collapse. The bureaucracy in Athens is now defying their masters in Berlin and Brussels which means that enforcement of any agreement, past or future, is no longer dependent on a new coalition government, but on the people of Greece being convinced that it is their duty to pay their taxes per any arrangements created by the leadership.
The Protothema article demonstrates the extent of the defiance:
If the troika auditors came in Athens these days, they would asked themselves for a renegotiation, even from scratch, since at its last quarter the government of Papademos did not sought to recover any of the taxes that were agreed for the first half.
The only State revenue was the hike in property (the last installment of 2011 was received in the electricity bill this year) and the adjustment of old debts with the dose of 100 euros.
Also, the first of the 200,000 ETAK notes of 2009 have yet to be sent -and perhaps will not be sent until the formation of a government-, from a total of 1,370,000 that remain unpaid for years because of mistakes that were made in clearing the real estate tax.
According to information, 100,000 from out of the 200,000 are either at zero or less than 27 euros so they do not get collected. The problem lies with issuing the rest of the 100,000 notes, asking homeowners to pay a total of 70 million. It appears that these will get a tax for 700 euros on average, that they would normally should have paid until the end of May and with no installments.
Rather than collecting these revenues they are continuously deferred and “until further notice.” In April the reduction of revenue by VAT and other taxes had reached 13%. Consequently, if troika auditors were to come back to Athens, they would see that all these revenues should have been collected at the 2nd half of 2012 and under conditions of even more severe recession and unemployment. In this case, the government and the troika would have re-written the memorandum, without much hope for its success.
This is what a nation’s government and economy looks like right before a total collapse and drastic change occurs. More importantly, this is a stark reminder for those who forgot what the Argentine and Russian governments looked like regarding their foreign financial obligations right before those nations engaged in a strategic default to free their citizenry. It is no longer a matter of if Greece will default, but obviously more of a matter of timing. The fear is that other member nations of the so-called PIIGS will view this as a more attractive option in the near future also.
To read the article in Protothema in full, click on the link below: