So, you’re probably wondering how Greece got to this point. The truth is it wasn’t just one thing, there are many factors that have contributed to Greece’s big fat mess of a debt crisis. Here are 10 weird ass things that have gone on in Greece that probably shouldn’t have.
Many Greeks and Greek businesses don’t pay their taxes. Greece’s economic decline has encouraged an “every man for himself” mentality. The defining factor of this need to survive? Not paying taxes.
“The Greek people never learned to pay their taxes …. because no one is ever punished. It’s like a gentleman not opening a door for a lady.”
The government commissions tax collectors, but the inefficiency stems from the fact that people themselves don’t report their purchases, salaries, or properties accurately (if they report them to the government at all). The way it works in Greece, if you make less than 12,000 euros a year, you don’t have to pay taxes. It’s not surprising then that ⅔ of Greek doctors happen to report only making 12,000 euros a year… just enough not to get taxed.
How do so many Greeks manage to avoid paying taxes? By paying in cash, and utilizing the black market to take out loans. Both of those methods are not tracked by the Greek government, meaning they can go undetected if an individual doesn’t report it. And for those who are caught evading their taxes, it’s not that big of a deal because very few people are actually prosecuted. A tax fraud case can take up to 15 years to settle, and aint nobody got time for that, so Greece is left without money from its citizens to help repay its massive debt.
A land registry is an official record of who owns what land across the country and it keeps track of any changes in ownership or if a mortgage is made. Greece has never had one, making enforcing and collecting property taxes extremely difficult, scaring foreign investors away, and making it almost impossible for the government to privatize assets. They were given $100 million by the E.U. to set one up in the early 90s but the E.U. demanded that money be returned when they saw little progress being made. The first ever land registry is projected to be completed by 2020.
The Greek public school system is one of the most inefficient and ineffective systems out there. It employs a crazy amount of teachers, four times more than the country with the best school system (Finland) , and yet it’s STILL one of the lowest-ranked systems in Europe. Greeks who send their kids to public school apparently assume that they’ll need to hire private tutors to make sure “that they actually learn something.”
Greece employs a huge number of tax collectors but the entire tax system in Greece is rigged to enable the entire society to cheat on their taxes. There isn’t much tax collectors can or want to do to fix this problem. Most of them accept the fact that most Greeks and Greek business avoid paying taxes. The ones that don’t go along with that general consensus are punished. They often take bribes from people who don’t want the government to poke their nose into their tax situation. If a tax collector gets caught accepting a bribe, it takes seven or eight years to get prosecuted, “so in practice no one bothers.” One tax collector actually did his job and when he was offered a bribe he went to his bosses and reported it. Shortly after he was taken off all tax investigations “because I was good at it.”
It’s called fakelaki, and it’s a national culture of having to bribe to get what you want and, a lot of the time, what you need. In hospitals across the country, doctors are known to withhold services or perform far worse without bribes even though they are supposed to be providing free health care.
Since the Greek economy has taken a turn for the worse, more and more people began putting their faith in the party known as Golden Dawn. They are an aggressively anti-immigration and extremely racist party that has attained 7% of the vote, making them an actual player in domestic politics. The party uses a Nazi salute, owns multiple copies of Mein Kampf, and touts a symbol that is way to similar to a swasticka.
Yes, it’s just as crazy as it sounds. Vatopaidi Monastery in Greece has been credited with the fall of the Karamanlis government in 2008, and the subsequent rise of George Papandreou as the new Prime Minister. A group of monks at the monastery were looking for money to revamp their ancient monastery. Lucky for them, they were able to bribe the government to exchange a relatively worthless lake that they owned in exchange for 73 different government properties valued at several billion dollars. The monks used their connections and bribery skills to build up a real estate empire, after convincing the government to rezone non commercial areas into commercial (and sellable) property. Fast forward- the monastery gets a lot of money, but the scandal is exposed, and the Greeks are pissed because it showed the extent of the corruption in their country. People got angry, a new Prime Minister was elected, and the international community realized how crazy the government spending was.
Greece’s train system is literally the worst. The rail system has basically been used by the government as a way to hide its debt. The government puts billions into the train system to employ people, which on paper looks like its helping employment and not adding to Greece’s official debt number. John Moumouris, a former chief executive of the railway said “This was an accounting trick, another good way for the government to hide its debt.”
Train tickets are kept low on purpose to keep transportation accessible to the people, meaning that the railway spends WAY more than it takes in. In order to just break even, the train system needs about 10 times as many people to ride the trains as do now, which is unlikely because the train system sucks. Trains are rarely on time, they take longer than expected often, and is generally in bad shape.
During all of this financial chaos, Greece hasn’t had enough money to pay government employees or to send pension checks. So, by the end of July, It needs to pay around €2 billion in salaries and pensions. Public sector workers and retirees might end up having to be paid with IOUs soon, because the odds Greece can pay back its own people are about as slim as them paying back the international community on time.
So 19 countries use the Euro including Greece. Why did they all decide to use the same currency? Two reasons: Make trade more seamless between countries. Typically when a government is in a recession it uses what’s called monetary policy to help dig itself out of the hole. But Greece is unable to do this for two reasons. First, it doesn’t have any money to invest in its own country. Secondly, it doesn’t have the economic institution in place to even handle large amounts of money responsibly.