IMF’s useless politicians

The IMF released yesterday its 2013 Article IV consultation Concluding Statement i.e. the “report” of its Mission to Greece. As politics supersede sound judgement the IMF report leaves a lot unsaid.

In point 3 the report discusses insufficient structural reforms particularly in the tax system where “Very little progress has been made in tackling Greece’s notorious tax evasion. The rich and self-employed are simply not paying their fair share, which has forced an excessive reliance on across-the-board expenditure cuts and higher taxes on those earning a salary or a pension”. The real problem, however, is not tax evasion but the tax system itself that heavily relies on heavy property and indirect taxes irrespectively of income. A system whose very high rates and burden practically force those who can evade taxes, to do so in order to survive. A system under which shipowners, the richest of the Greeks, are constitutionally shielded from any taxation. With 30% of taxpayers currently unable to meet their tax burden and with taxation practically killing the economy there is no mention in the report of the urgent need to reform the tax system itself and not just the tax collection mechanism, which is the only priority for the IMF.

In order to reform the tax system the government should streamline expenditure and improve the dismal productivity of the public sector. The IMF report stresses the need for “limited mandatory redundancies” in the public sector noting that “while projections suggest that attrition will be just about enough to meet medium-term staffing targets, the provision of important public services is already hampered by lack of qualified staff in key areas, like banking supervision and tax administration. Mandatory redundancies that provide room to hire new, well-qualified and motivated staff will thus need to be a key component of the plan for modernization of the public sector, and in the process lend credibility to the policy of relying primarily on attrition. The taboo against mandatory dismissals must be overcome.”

This would have been an excellent idea if the word “limited” was changed with “extensive” in regards to mandatory redundancies. With more that 1.500.000 unemployed in the private sector the IMF is afraid to tell the truth. While it says that the “taboo” should be overcome it dampens its own conclusions by asking for “limited” redundancies while everyone knows that sweeping redundancies are needed.

Similarly the report contains the following politically correct statement about improving the business environment “The government’s welcome public commitment to improving the business environment and accelerating privatization now needs to be matched with results.” This is the IMF way of saying that the government has does absolutely nothing to improve the business environment even in cases where reforms would be revenue neutral. And that is simply because the government does not care about the private sector as its’ priority is to protect the bloated inefficient public sector that is dragging us down.

Also, one of the biggest problems lies with the tragically inefficient justice system that scares away all potential investors and, with them, any hope of recovery. This critical issue does not appear anywhere in IMF's report and is only casually mentioned in other EU reports on Greece.

The current fiscal “progress” is based on non sustainable taxation and any future hopes of growth are killed by the lack of structural reforms.

Greece is very sick and in need of a doctor. This is the role the IMF should play and not that of a politician. We already have too many of those.

Οι δυνάμεις της συντήρησης (ΠΑΣΟΚ, ΣΥΡΙΖΑ κλπ) θέλουν να επανασυστήσουν τους Οργανισμούς Εργατικής Εστίας και Κατοικίας

Ο αξιότιμος κος Στρατούλης χαρακτήρισε έγκλημα του ΠΑΣΟΚ & της ΝΔ το “κλείσιμο” των Οργανισμών Εργατικής Εστίας και Εργατικής Κατοικίας. Ο Ευάγγελος (sic) Βενιζέλος (sic) αν και κατά Στρατούλη «εγκληματίας» χαρακτήρισε το προαναφερθέν «κλείσιμο» ετσιθελική παρέμβαση της τρόικας και υποσχέθηκε να την αλλάξει χωρίς να εξηγήσει σε κανέναν γιατί την δέχθηκε και την συνυπέγραψε.

Η λέξη κλείσιμο είναι σε εισαγωγικά διότι το σύνολο των υπαλλήλων και το μισθολογικό κόστος των ανωτέρω οργανισμών μεταφέρθηκαν στον ΟΑΕΔ ενώ διατηρήθηκε το μέρος των εισφορών που «δίνει» ο εργαζόμενος. Παρενθετικώς ποτέ δεν κατάλαβα τις εισφορές «εργοδότη» και «εργαζόμενου» δεδομένου ότι ιστορικά ως εργοδότης πλήρωνα και πληρώνω και τις δύο εγώ ή, σωστότερα, η εταιρεία. Το σύνολο των ανωτέρω εισφορών ανέρχεται σε 2,45% επί του μισθού ή κατά μέσο όρο σε 500 ευρώ ετησίως ανά απασχολούμενο.

Θα είχε πολύ ενδιαφέρον εάν οι δυνάμεις της συντήρησης, της διαφθοράς, του πατερναλισμού ρωτούσαν κάποτε τους εργαζόμενους εάν θα προτιμούσαν να εισπράττουν το ποσό αυτό αντί να απολαμβάνουν τις «παροχές» της εργατικής εστίας και κατοικίας. Είμαι διατεθειμένος να στοιχηματίσω ότι το ποσοστό που θα έλεγε «τα λεφτά στο χέρι» θα ξεπερνούσε το 95%.

Η κατάσταση σήμερα είναι ακόμη χειρότερη γιατί έχει διατηρηθεί το μεγαλύτερο μέρος των εισφορών ενώ έχουν καταργηθεί όλες οι παροχές πλην των παλαιών επιδοτήσεων δανείων του ΟΕΚ.

Η τρόικα, σωστότατα, απαίτησε να κλείσουν δύο οργανισμοί οι οποίοι δεν έχουν λόγο ύπαρξης και επιβαρύνουν σημαντικά το κόστος εργασίας και την ανταγωνιστικότητα. Αλλά βλέπετε, πέρα από τους εργαζόμενους σε αυτούς ένα σημαντικό μέρος των εισφορών καταλήγει αδιαφανώς σε παρασιτικούς συνδικαλιστές οι οποίοι απολαμβάνουν σημαντικούς πόρους άσχετα από επίπεδο υπηρεσιών τους προς τους εργαζομένους. Ο υγιής συνδικαλισμός είναι αυτός στον οποίο ο εργαζόμενος επιλέγει, συμμετέχει άμεσα και πληρώνει ο ίδιος, προαιρετικά, τον φορέα ο οποίος τον εκπροσωπεί. Είναι αυτός όπου ο εν λόγω φορέας παρέχει τις υπηρεσίες του αποκλειστικά στα μέλη του δηλαδή τυχόν συμφωνίες με εργοδοτική οργάνωση ή εργοδότη εφαρμόζονται αποκλειστικά σε αυτά και όχι αυτομάτως σε όλους τους εργαζόμενους. Δεν είναι ο «κοινωνικός εταίρος» που εισπράττει «από την πίσω πόρτα" ποσοστά από διάφορες εισφορές χωρίς να ρωτήσει κανέναν εργαζόμενο (ή εργοδότη στην περίπτωση των εργοδοτικών οργανώσεων) εάν θέλει την υπηρεσία εκπροσώπησης.

Ο λόγος που έχουν απηυδήσει οι ξένοι με εμάς είναι ότι το Δημόσιο αποδεικνύεται λερναία ‘Υδρα. Ο Κουτρουμάνης «κλείνει» τον ΟΕΚ και την ΕΕ και μεταφέρει το μεγαλύτερο μέρος του κόστους τους στον ΟΑΕΔ. Δεν δίνει δεκάρα για το πεντακοσάρικο το οποίο σήμερα θα έκανε τεράστια διαφορά για τον εργαζόμενο και την οικονομία. Η βασική του προτεραιότητα ήταν να διατηρήσει ο πελατειακό κράτος και τα τροφεία του παρασιτικού συνδικαλισμού από τον οποίο προέρχεται.

Το μνημόνιο και η τρόικα, με ελάχιστες εξαιρέσεις, έχουν σχεδιάσει ευεργετικές παρεμβάσεις που εάν υλοποιηθούν θα αλλάξουν τη χώρα προς το καλύτερο. Τα άθλια παράσιτα όμως της συντήρησης δεν θέλουν να θίξουν με τίποτα τους «πελάτες» τους και την σφαίρα επιρροή τους. Το προκλητικότερο δε είναι ότι ο κάνουν στο όνομα του «λαού» ο οποίος πληρώνει τα σπασμένα χωρίς να τον έχει ρωτήσει ποτέ κανένας εάν θέλει. Ξέρετε πόσα θέατρα μπορεί να πάει κανείς με πεντακόσια ευρώ;

Επιτέλους ας σταματήσει η ανόητη σύγκριση Ισλανδίας - Ελλάδας

Η σύγκριση μεταξύ Ελλάδος και Ισλανδίας που κυκλοφορεί σε διάφορα blogs είναι αδόκιμη (για να μην πω εντελώς ανόητη).

Η Ελλάδα είναι εντός της Ε.Ε. και της Ευρωζώνης, 30πλάσια σε μέγεθος και πληθυσμό  από την Ισλανδία και με σοβαρότατα δομικά προβλήματα τόσο σε επίπεδο οικονομίας όσο παιδείας και κοινωνίας. Η Ισλανδία είναι μια μικρή μεν αλλά υγιής οικονομία με μεγάλες εξαγωγές ως ποσοστό του ΑΕΠ  (56%), τουρισμό, φθηνή ενέργεια και εμπορικό πλεόνασμα.

Κοινωνικά (και γονιδιακά) είναι απολύτως ομοιογενής και δεν έχει διαφθορά (π.χ. φοροδιαφυγή, Τσοχατζόπουλους, πελατειακό σύστημα, ΔΕΚΟ). Το πρόβλημα της Ισλανδίας αφορούσε την γιγάντωση του τραπεζικού τομέα στο εξωτερικό με απάτες τύπου Ponzi (αεροπλανάκι) και θύματα κυρίως Βρετανούς και Ολλανδούς καταθέτες οι οποίοι αποζημιώθηκαν ως ένα βαθμό από τα κράτη τους.

Στη συνέχεια η Αγγλία και η Ολλανδία ζήτησαν από τους Ισλανδούς φορολογούμενους να πληρώσουν τα σπασμένα της απάτης των τραπεζών τους στηριζόμενες κυρίως στην ισχύ τους και στον εκβιασμό μέσω του ΔΝΤ αφού η νομική βάση διεκδίκησης ήταν σαθρότατη εάν όχι ανύπαρκτη (στηριζόταν σε ένα σύμφωνο Ισλανδίας-ΕΕ βάσει του οποίου η πρώτη έπρεπε να ιδρύσει ταμείο προστασίας καταθέσεων).

Η Ισλανδία βρήκε χρήματα από την Ρωσία και αρνήθηκε (σωστά) να πληρώσει. Χωρίς να χρειαστεί τελικά να δανειστεί όλο το ποσό από την Ρωσία και με τη στήριξη των Σκανδιναβών, οι Ευρωπαίοι και το ΔΝΤ δέχθηκαν να τελικά να τη χρηματοδοτήσουν.  Η μικρή και υγιής της οικονομία άντεξε αλλά πρακτικά έχασε την εμπιστοσύνη στο νόμισμά της, το οποίο υποτιμήθηκε σημαντικά.

Η Ελλάδα δεν έχει ΚΑΜΙΑ ΣΧΕΣΗ με την Ισλανδία ως παράδειγμα αφού

- Έχει ένα ιδιαίτερα διεφθαρμένο, υπερτροφικό και αναποτελεσματικό κράτος το οποίο αποτελεί το μεγαλύτερο εμπόδιο στην ανάπτυξη συνθλίβοντας τον παραγωγικό ιδιωτικό τομέα.

- Η δικαιοσύνη στη χώρα μας έχει πρακτικά καταρρεύσει

- Η Ισλανδία δεν έχει το μεταναστευτικό ζήτημα της Ελλάδος με ότι αυτό συνεπάγεται στην οικονομία.

- Η Ισλανδία δεν δαπανά τεράστια ποσά για την άμυνά της

- Η Ισλανδία εξάγει το 56% του ΑΕΠ της και η Ελλάδα το 20%!. Τα νούμερα συμπεριλαμβάνουν και υπηρεσίες.

- Η Ισλανδία έχει ιστορικά εμπορικό πλεόνασμα και η Ελλάδα έλλειμμα. Πριν την κρίση είχε πλεονασματικό προϋπολογισμό.

- Η Ισλανδία έχει πάμφθηνη γεωθερμική ενέργεια

- Η Ισλανδία είχε το δικό της νόμισμα. Η μετάβαση στην δραχμή (ή κάτι άλλο) θα ήταν καταστροφική (βλ. την οικονομετρική ανάλυση του Παύλου Μυλωνά της ΕΤΕ)

- Η Ισλανδία βρήκε τη Ρωσία πρόθυμη να της δανείσει 4 δις με αποτέλεσμα να "σπάσει" ο εκβιασμός της Αγγλίας και της Ολλανδίας. Οι άμεσες ανάγκες της όταν ξέσπασε η κρίση ήταν 600 εκ. Ευρώ. Η Ελλάδα έχει δανειστεί περισσότερα από 250 δις συμπεριλαμβανομένου του EFSF, του Ευρωσυστήματος και του ELA. Δεν υπάρχει κανείς πλην της τρόικα (π.χ. Κίνα, Ρωσία, εξωγήινοι) που να έχει τέτοιο χρήμα και να θέλει να μας το δανείσει.

Η Ισλανδία είχε δίκιο να αντισταθεί στον άθλιο εκβιασμό της Αγγλίας και της Ολλανδίας. Η Ελλάδα δεν εκβιάστηκε από κανέναν ενώ τώρα ο Τσίπρας εκβιάζει. Η Ισλανδία ηθικά είχε δίκιο και εμείς άδικο γιατί από το 2001 τρώγαμε τα λεφτά (που όντως μας δάνειζαν ανοήτως) των φορολογουμένων του βορρά.

Η Ελλάδα, εάν η τρόικα "τραβήξει τον αναπνευστήρα" θα υποστεί καταστροφή την οποία μπορείτε να διαβάσετε λεπτομερώς στην έκθεση της Εθνικής. Για όσους βιαστούν να μιλήσουν περί τρομοκρατίας και καταστροφολογίας οι συναρτήσεις και το οικονομετρικό μοντέλο παρουσιάζονται αναλυτικά στο τέλος. Μέχρι τώρα, πέρα από άναρθρες κραυγές και τις συνήθεις στη χώρα μας θεωρίες συνωμοσίας, δεν είδα κανέναν να αμφισβητεί με επιστημονικά επιχειρήματα το μοντέλο ή τους υπολογισμούς του.

Το να ψηφίσετε αντιμνημονιακά αντιστοιχεί με το να επιθυμεί κάποιος που είναι στην εντατική να κλείσουν τα μηχανήματα. Εάν είναι εγκεφαλικά νεκρός έχει νόημα και λέγεται ευθανασία. Το λυπηρό είναι ότι πολλοί, ο εγκέφαλος των οποίων φαίνεται να παρουσιάζει δραστηριότητα, θέλουν να αυτοκτονήσουν αρνούμενοι την πάμφθηνη οικονομική βοήθεια αλλά και τις σωστότατες μεταρρυθμιστικές προβλέψεις του δεύτερου μνημονίου, τις οποίες είμαι βέβαιος ότι ελάχιστοι έχουν διαβάσει.

Όσοι ενδιαφέρονται για το ιστορικό μπορούν να επισκεφθούν την wikipedia:
http://en.wikipedia.org/wiki/2008–2012_Icelandic_financial_crisis

Mrs. Lagarde’s dangerous myopia

I find Mrs. Lagarde, whom I had the chance to meet in the past when she was serving as France’s export minister, competent, smart and charming. That is why I am surprised by the fact the she doesn’t “see it”.

In an interview today the IMF head urged Greeks to pay taxes, saying she worries more about the plight of children in sub-Saharan Africa than the people of the crisis-hit European nation. I will not linger on the second part of this callous statement, which bears the question why did the IMF help Greece in the first place when, with the same amount of money, they could, at least in theory, do much more for the children in sub-Saharan Africa. After all Greece imported more than 1.000.000 smart phones last year with an economy in tatters. But again, this is beside the point I want to make.

The troika and most politicians in Greece focus on tax evasion as one of Greece’s major problems. Battling tax evasion has been touted as the government’s first priority for more than two decades now. But is tax evasion actually the problem?

In 1991 the great thinker Panayiotis Kondylis wrote “The fact that most public servants at all levels hailed from culturally retarded social strata, had serious consequences on the nature of the state apparatus, whose functioning stumbled upon their illiteracy, narrow-mindedness, guile and inhibitions, as well as the insurmountable inability of the average employee to base his work on impersonal, and abstract principles, as long as his mentality was grounded upon the values of a patriarchal society, i.e. his primary loyalty to his homeland,  his relatives,  his friends,  the friends of his friends, to his patrons and protégées”.

Kondylis argues that Greece never evolved into a bourgeois society and still remains, by and large, a patriarchal one. “When the patriarchal relationship moves to politics it evolves into what we call today a customer relationship, while retaining its fundamental characteristics of obedience and protection”. In this context taxpayers are unhappy to contribute to the benefit of people outside their “patriarchal” circle but more than happy to do so to a politician, or friend, who will “take care of their affairs” when in need. Outside Kondylis’ philosophical parlance this phenomenon will be plainly described as “corruption”. This, and not the tax system, should be the object of the troika’s attentions.

I do not think that anyone involved in the tax system, whether as a taxpayer, as a firm, or even as a tax collector for the Ministry of Finance will argue that the existing framework is simple, fair or effective. Decades of piecemeal interventions and efforts to circumvent the problematic (i.e. corrupt-patriarchal) state revenue services in a canvas of growing corruption and black/political money have resulted in an intricate, formalistic, dysfunctional, inefficient, and grossly unfair system (the tax burden is mainly from indirect and property taxes that are largely independent of income) that hampers economic growth.

Although everyone agrees that the tax system is in itself unworkable, its sorry state has more to do with function rather than design. Even the most elegantly designed tax system will fail if the interests and therefore the behavior of all stakeholders including politicians, revenue service officials, companies and taxpayers are not aligned. The biggest obstacle today towards such an alignment is corruption. Widespread tax evasion is only one side of a very complex phenomenon that includes off the books financing of political parties and widespread bribe giving and bribe-taking. The economic behavior of citizens and businesses, be it legal or illegal, is in fact always rational. Therefore tax evasion and corruption simply exist because they benefit those engaged in them.

So if Mrs. Lagarde wants Greeks to pay taxes she should work on a national program against corruption. Obviously a well designed and fair* tax system will be an integral part of such a program. Another would be to review today's highly hypocritical system of political party funding from businesses and citizens by applying transparency standards e.g. like in the U.S. and redefining spending limits for election campaigns to realistic levels. Dividing electoral districts into smaller ones and reforming the electoral system based e.g. on the German model will reduce the investment required to be elected as an MP and therefore the need for dirty money.

The major effort of a national program against corruption should be focused on public servants, especially those employed in the revenue service. The establishment of an independent auditing authority with well-paid, un-tenured staff, who may serve for a limited time and whose income and wealth will be carefully monitored, will be an important step. The aim of such a mechanism should not be to increase revenue per se, but to reach a very high level of compliance of businesses and citizens with the new simple and fair tax framework. The Ministry of Finance today does not really promote compliance when, by setting revenue targets to its directors an auditors, each company is, at the end, forced to pay an unofficial percentage of its revenue in additional taxes, pretty much regardless of the extent to which it has evaded taxes. This percentage is shared between the state and various recipients (mainly public servants and politicians) in the grey money chain.

Ironically the troika achieved the same thing by imposing tax revenue targets and allowing the Greek government, after arduous negotiations, to impose the wrong kind of taxes thereby practically killing the economy instead of targeted measures that would have revived it.

The National Programme against corruption should include carefully designed checks and balances. Last year the Ministry of Finance set up its own Internal Affairs department despite of the fact that the respective police department (that had hitherto authority over tax auditors) had an excellent track record and was part of a different ministry. No one, for any reason should be exempt from audits including political parties, the church, local authorities, the army, politicians, trade unionists, banks, media and those who now, in practice, enjoy special treatment. Last year’s audit of commercial banks by and independent and competent entity (Blackrock) was an excellent example of a decision in the right direction.

Corruption can be useful to politicians in financing their campaigns and lifestyle, but brings them and Mrs. Lagarde to despair when it depresses tax revenues. But unlike cholesterol there us no such thing as good and bad corruption. If we want to deal with the catastrophic effects of tax evasion we should decide first, as a society, if we will continue to tolerate “patriarchal” corruption or not.

* Mr. Venizelos, the disastrous finance minister, personally wrote a tax exemption clause for Greek ship-owners into the country’s constitution when it was last amended.

Is the Greek fiscal adjustment program actually fuelling tax evasion?

The IMF’s Poul Thomsen said that Greece would fail to meet its targets if more was not done to tackle tax evasion. He said the fiscal adjustment program would not succeed unless “Greek authorities make quicker and more decisive structural reforms to address tax evasion.”

Mr. Thomsen is in charge of the Greek “program” for two years now. His numerous rounds of negotiations with the Greek government have resulted in the following

- Unbearable and debilitating taxes that are independent of income e.g. taxes on property and consumption (VAT, fuel, tobacco, alcohol etc)

- The loss of more than 500.000 jobs in the private sector raising the number of unemployed to more than 1.000.000 or 22% of the workforce. This will certainly result in another “lost generation” similar to the UK in the ‘70s.

- A sharp decline in property values as well as invested capital.

- A monumental credit crunch that has sucked all the liquidity out of the economy.

- Haphazard and ineffective “reforms” that have not addressed the main issues of a gargantuan state, corruption, a failed judiciary and an economy asphyxiated by over-regulation

What the fiscal adjustment program has done is actually to rob those Greeks who did pay taxes in the past of their savings and in many cases of their livelihood. New taxes piling upon previous taxes that have lost their effectiveness as the economy is crashing, are mainly being paid by taxpayers dipping into their savings, thereby further demonetizing the economy.

Mr. Thomsen has agreed to across-the-board cuts to pensions instead of focusing on ridiculously high government and public sector pensions that are placing an unjust burden on the taxpayer. He also agreed to horizontal wage cuts instead of a sweeping restructuring of the public sector and the elimination of hundreds of thousands of totally useless “jobs” in the public sector.

He failed to negotiate and push through real reforms many of which were actually part of his different “memorandums”. It is eminently hypocritical of him to try to pin this on “structural reforms needed to address tax evasion” as he has been part of the group that has shaped the impossible tax burden Greeks are facing today. How can you tackle tax evasion if the tax system is impossible to comply with, collected taxes pay hundreds of thousands of useless public servants and DEKO employees, those who collect taxes are mostly corrupt and the judicial system is impossibly slow and ineffective;

By failing to push through reforms and by piling tax upon tax on the Greeks, Mr. Thomsen has actually been instrumental in fueling tax evasion and has so far crushed those Greeks who did pay taxes in the past. So he’d better shut his foul (or should I say “poul”) mouth.

The remains of an economy

……. but it is like a beautiful woman whose face has been splashed with vitriol. Here and there, an arch, a pendant, a shattered remains of arcade, is all that is left of her renowned beauty… 

The great philhellene and author Lawrence Durrell was referring to the city of Zakynthos after the terrible earthquake of 1953. He could easily have been referring to the Greek Economy after two years of austerity measures that have destroyed hundreds of thousands of jobs, billions of Euros in invested capital and have plunged the population in a permanent state of clinical depression.

Transforming the last Soviet-era economy in Europe to a competitive market economy is not an easy task. It has proven difficult even for powerful leaders with clear objectives and an iron will (which is hardly the case here). Ironically many in Greece blame “capitalism” for all our woes when our economy is anything but “capitalistic”.

Instead of breaking the myriad of bonds that crush any productive economic effort (labor market rigidities, over-regulation, collapsed justice system, systemic corruption) the little men in charge of our rescue decided to tax the economy to death. By applying “horizontal” taxes and pay/pension cuts they have in fact distributed the cost of austerity very unfairly and, worst of all, in a way that has destroyed and is destroying both human capital (the hysteresis phenomenon in unemployment) and invested capital. This means that even if/when the economy picks up again it will balance at a much lower level of economic activity and will lack the means of real growth. And all this in order to “save” (in the medium term at best) the hundreds of thousands of state employees that ND and PASOK have piled upon us in their efforts to remain in power. And, despite Mr. Pangalo’s famous quote (“we “ate” them (i.e. the loans) together”), most of us Greeks were not sitting at his table. We are simply now paying the bill.

Sloppy Troika

I read excerpts of Mr. Traa’s speech at the Economist conference with great interest. He tried to explain the dismal failure of “troika’s” plan by blaming it on the greater than expected instability in the financial markets, European politics and Greek government incompetence. While he is right on all counts, the IMF/EC/ECB team still bears a significant share of responsibility for killing the Greek economy without really sorting out the problem. The initial “Memorandum” had been hastily put together but this does not altogether justify the sloppy work behind it. How did the troika, for example, rationally expect revenues from the extraordinary (i.e. permanent) tax on company earnings to remain stable at 600 million Euros per annum until 2013? They obviously used an Excel spreadsheet to calculate potential state revenue from each measure without considering the interaction between taxes and the simple fact that all taxes directly or indirectly affecting the consumer e.g. VAT, taxes on property, gasoline, tobacco, alcohol etc are all paid from the same wallet. They apparently ignored the fact that price increases will, in most cases, adversely affect demand and therefore the yield of planned measures. They have tragically underestimated the depth of recession that all this Mongolian cluster fuck of a plan would cause.

Although the initial memorandum had a number of commitments that were in the right direction, e.g levelling severance pay between white collar and blue collar workers the Troikans have done little to push them through. They happily agreed to additional tax measures without insisting on expense reduction which should have been the focus from day one. They were also very lax on the Greek government which was not really implementing any of the much needed  deregulation. They were afraid, from day one, to ask for redundancies in the public sector although it was mathematically obvious that there was no other way to permanently reduce government deficit. Instead they were happy to pile new taxes on the same group of taxpayers, destroying the economy and any hope of recovery. More that 300.000 jobs were lost in the private sector half of which would have been sustainable under a better plan.

Mr Traa was never tasked with implementing the fiscal austerity agreement. But he is responsible for putting together a badly designed plan. He might claim that there are no econometric tools that will work on the semi-Soviet Greek economy. He might also claim that the European Commission came to Greece with an axe to grind. Although these claims may be true, this does not change the fact that they have botched the job. And they should, at least, accept their share of responsibility instead of taking the moral high ground.