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There is a huge tax problem in Greece. That being said, it pays to do an analysis where you look at tax revenue per capita related to GDP per capita. It's not an apples to oranges comparison between countries--obviously--since tax rates are different in every country. Whichever way you cut it, tax collection in Greece might seem meager to those in high tax Scandinavian countries, but not very different from other European countries. When you factor in the main industries in Greece (tourism especially) then its official tax evasion rate of 25% (some put it up to 30%) is perhaps a considered result, when compared to the EU tax evasion rate of 19%. Or, heck, 17% in the USA, where it is actually legal for a hedge fund manager to pay half the amount of tax on his income of hundreds of millions as someone in the $200k bracket.

I also question the lack of competitivity. Greece is not a high-tech manufacturing country. They are not competing for high-tech stakes. It does compete in agricultural markets, and in metals. Beyond that, however, tourism, banking and shipping are major industries.

The public sector is a whole other ball of wax which I can't say I understand because of the wide divergence of information about average salaries.

I will say though that if you bring together all the stories of Greek boondoggles with foreign companies, bribes and corruption, especially in the purchase of military weaponry, but also in bridges to nowhere and even security systems, you can easily come up with in excess of $100 billion over the last 10 years which the country did NOT absolutely need to spend.

by Upstate NY on Fri Feb 18th, 2011 at 11:37:37 AM EST
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