Are there another people in Europe so determined to shoot themselves in the foot as the Greeks?
Against all the advice of other euro states, they elected — twice — in recent years leaders who vowed to reverse what little progress had been made to liberalize the Balkan nation’s economy. Labor market reforms came undone last year. Privatizations were canceled or pushed back.
The country only agreed to sustain reforms in return for a third, €86 billion bailout this summer when it, once again, teetered on the brink of default.
Now promises have already been broken and targets missed. Greece is typically slow to implement the economic policy changes it commits to undertake. Yet there seems to be no holdup in policies that make things worse.
The Economist reports that the latest brilliant idea to come out of Alexis Tsipras’ far-left coalition is a 20-percent rise in the levy on companies’ profits that goes toward pensions.
Whereas other crisis countries, like Ireland and Portugal, have deliberately kept businesses taxes low to stir job growth, Greece has raised its time and again: from 20 percent in 2012 to 29 percent in 2015.
The result is predictable: By some estimates, more than 200,000 businesses have closed or in some cases left Greece in the last five years. The taxable profits declared by companies has fallen by a third.
“Carry on in this vein and there will not be many businesses, or much profit, left to tax,” the newspaper laments.