By Wolf Richter, San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Cross posted from Testosterone Pit.
InGreece
, three-quarters of the independent doctors, lawyers, and engineers declare taxable income below the existential minimum. Tax fraud amounts to €20 billion per year (8.5% of GDP). And tax dodgers owe €63 billion in unpaid taxes (27% of GDP). The country is bankrupt and has been kept afloat by the Troika (EU, ECB, and IMF), of which Germany is by far the largest contributor. And the numbers are staggering: the first bailout package of €110 billion, the current bailout package of €130 billion, and the debt swap of €107 billion, in total €347 billion, amount to a mindboggling 150% of Greece’s GDP!
And even that won’t be enough, apparently, according to a crescendo of German politicians, among them Finance Minister Wolfgang Schäuble who inserted these devastating words into his letter to the members of the Bundestag: “I cannot give any guarantees that the path taken will lead to success.” And: It’s possibly “not the last time that the German Bundestag will have to deal with financial aid for Greece.” Thus, he put a third bailoutpackage on the table.
On Monday, the Bundestag will vote on the second bailout package of €130 billion plus €24.4 billion from the first package that hasn’t been paid yet, a total of €154.4 billion. There is resistance within the governing coalition. And the opposition SPD and Greens accused the government of deception. The documents they received were incomplete, they said. Though there were several hundred pieces of paper, they didn’t include the most important: an analysis of Greece’s ability to service its debt in the long term. Most likely, they said, Greece would need to be bailed out again after 2014 because it won’t get its finances in order by then, and won’t be able to fund itself in the capital markets. €50 billion would be needed, they estimated. And yet, the SPD and the Greens will largely vote for the bailout, which is expected to pass.
Read more: http://www.nakedcapitalism.com/2012/02/wolf-richter-greece-%E2%80%9Cthe-bottomless-barrel%E2%80%9D-as-germans-say.html
In
And even that won’t be enough, apparently, according to a crescendo of German politicians, among them Finance Minister Wolfgang Schäuble who inserted these devastating words into his letter to the members of the Bundestag: “I cannot give any guarantees that the path taken will lead to success.” And: It’s possibly “not the last time that the German Bundestag will have to deal with financial aid for Greece.” Thus, he put a third bailout
On Monday, the Bundestag will vote on the second bailout package of €130 billion plus €24.4 billion from the first package that hasn’t been paid yet, a total of €154.4 billion. There is resistance within the governing coalition. And the opposition SPD and Greens accused the government of deception. The documents they received were incomplete, they said. Though there were several hundred pieces of paper, they didn’t include the most important: an analysis of Greece’s ability to service its debt in the long term. Most likely, they said, Greece would need to be bailed out again after 2014 because it won’t get its finances in order by then, and won’t be able to fund itself in the capital markets. €50 billion would be needed, they estimated. And yet, the SPD and the Greens will largely vote for the bailout, which is expected to pass.
Read more: http://www.nakedcapitalism.com/2012/02/wolf-richter-greece-%E2%80%9Cthe-bottomless-barrel%E2%80%9D-as-germans-say.html
No comments:
Post a Comment