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The anti-austerity wave that is sweeping across Europe could spell more trouble for the Euro zone as ignorant politicians are riding the popularity train and demanding that taxes be hiked in order to finance future growth plans. And where will the growth come from if taxpayers can no longer afford to pay more?
As harsh as it may sound, Greece has gotten what it deserves – after years of cronyism and corruption, someone has to foot the bill. Even after their humiliating defeat in Sunday’s elections, the two traditional parties are acting as if they were not involved in the payoffs of the past two decades, or in placing relatives and voters in non-existent civil service positions which the ordinary workers have financed through their taxes (or whatever has been collected).
Now, you have an alliance of leftist and anti-austerity parties that want to show the finger to the EU’s paymaster Germany, not realising that they have no choice but to continue with the harsh terms and reforms imposed by the Troika before Greece disintegrates into a black hole.
There is no doubt that in Greece, France and Spain, as in Cyprus, the only way out of the current crisis is growth, but this cannot come at the expense of further pressure on SMEs and employers. The Middle Class can barely afford paying more taxes, while the super-rich – some of whom are well-known financiers of the Leftist parties – will simply have to cough up more contributions, perhaps for a short period of time.
Cyprus has been the slowest in the Union to implement austerity measures, which still have not reached the desired levels simply because we are ten months away from the next elections. Unproductive civil servants are still clinging to their jobs, despite the somewhat improvements in the government machine and the efficiencies gained through selective online services.
Tax collection is gradually picking up but state revenues are falling due to a negative business sentiment. Privatisations have not yet materialised, while the government is losing millions by the day simply because it refuses to license casinos and regulate the online gaming shops that have cropped up in every neighbourhood.
Waiting for the next Russian or Chinese multi-billion loan will simply not solve the problem. But at least, for now, the current administration can blame everything on the former Central Bank chief Athanasios Orphanides. Maybe even the reasons that led to and the botched handling of the Mari disaster.
