This is yet another blatant example of the public-private government of Greece deliberately damaging the Greek economy and physically assaulting the Greek people.
In an unprecedented move by a so-called democratic government, private companies will now be collecting taxes on behalf of the governments as a way to take cash control away from businesses. With this proposal banks are signalling that they are ready and willing to start interfering with the cash flow of private businesses on behalf of the government. A definition of fascism.
The goal of this measure appears to be to force Greeks to replace paper money with plastic money something Greek are very reluctant to do.
The majority of purchases in Greece are done with cash and this is something the private banks and government seem to be determined to change.
To a Welsh person the use of plastic to purchase good and services is standard practice now, even for the smallest purchases.
The widespread use of plastic money has never really been an issue until 2008 but with most of the major banks in Europe arguable teetering on the edge of bankruptcy it is becoming more and more important for people to be able to lay their hands on hard cash should the worst happen and their bank collapse.
Deposit guarantees issued by government are a confidence tool and have no real power. If there ever were a baking collapse it is not clear if central banks would be willing to help out governments by printing sufficient cash to cover deposits.
If the worst were to happen it would not be clear if governments would be forced to pay interest on this printed money. If they were, the debt burden of European government would balloon from already strained levels.
In reality, central bankers are much more likely to force governments to bail out bankers rather than the people.
Bailing out savers would arguably not have an effect on inflation as the savers money was already in existence and was being used by the bank.
Bailing out of the banks creates a very real possibility of massive inflation as central banks would have to create money out of thin air to create money to cover the losses of the banks gambles.
The inflation created would devalue the entire populations money and would especially effect those who have saved or those who have retired or are close to retiring.
Central banks letting banks fail would cause a short-term problem but if savers were reimbursed with money already in existence they would still be left whole as would the rest of the population as inflation would not be an issue.
However given governments unwillingness to let banks fail, the sensible option of letting bad companies fail is unlikely to be taken, instead governments seem to be intent on entering a different reality to the rest of the population, a reality where they believe that printing money from a printing press can somehow create prosperity and make the current problems go away.
Sure, the problems may go away to those how get the cash first, but the more people’s hands that printed cash go through the less purchasing power it will have.
Only banks as private companies will benefit in the long-term by money printing.
The population at large will almost certainly be worse off.
Which takes us back to Greece and the massive use of cash in the Greek economy.
Greeks are more prepared for any financial crash than Welsh and British and by some margin.
Given the fragility of Greek banks you would imagine that the government would not want to be seen as recommending people put their money in the banks yet there appears to be no reservations.
Greek politicians seem to have no problem recommending people put money in banks whose stability is questionable. Can you imagine the German government recommending people buy Opel cars when GM entered difficulties in the USA?
If Greek politicians really had the best interests of Greeks at heart they would be encouraging people to hedge their bets, you would think the Greek politicians would want their population to be as prepared as possible should the banking system collapse.
And a cash society is one of the best ways a country can prepare itself against financial turmoil. Greek politicians should be glad that Greece has a cash economy but apparently not.
There is no doubt that in my mind that the politicians in Greece are 100% acting in the best interests of the international banks but the motivation of those involved may be different.
People like Papademos are fully aware of what they are doing, however the really dangerous Greek politicians are those who sincerely believe that the welfare of the banks is directly related to the welfare of the Greek people.
Politicians who think that big banks are essential to the Greek economy and anything which saves them will save Greece will lead, and are leading, the Greek people directly into tyranny.
There is another way, Greek politicians do not need to be selling themselves out to the banks, there are other choices.
Because Greek politicians believe that the interests of the banks is related to the interests of the people, they cannot see the wood for the trees. The politicians are so unaware of other possiblities they do not even realise they are being blackmailed.
Indeed, the politicians are so brainwashed the bankers do not appear to even need to blackmail the politicians as the politicians are being 100% co-operative to their captors
Greek politicians are suffering from Stockholm Syndrome. Greek politicians have fallen in love with the people that are keeping the country captive. Greek politicians are rationalizing the actions they are taking.
The bankers have taken the Greek economy hostage, Greek politicians have been told they must abuse the Greek population to save the bankers because the country cannot survive without the banks.
Perhaps people who are prepared to physically abuse the population of a country do not deserve to have the power to control a country? Whether the power by imagined or actual.
|Plastic money to curb VAT evasion|
The ingenuity of finance ministry advisors knows no bounds when it comes to collecting taxes by unconventional proxies.
After enlisting the Public Power Corporation’s electricity bills to slap the infamous ‘special property tax’ on all buildings hooked on the state provider’s all-encompassing power grid, the government’s second-best option for collecting VAT taxes directly at the source of consumer transactions is the perennial credit or debit card.
As an incentive for citizens to start paying most of their bills with plastic money, the government plans to offer a 3 percent discount on VAT charges for every bill paid through credit of debit card instead of cash.
The normal VAT rates of 23 and 13 percent would thereby be reduced to 20 percent and 13 percent respectively.
The purpose of the new measure will be to collect the VAT directly through the banking system, thus preventing tax-evading traders from illegally withholding indirect taxes in their quarterly VAT return declarations.
Although the measure could be introduced without the incentive of a discount, in a country where the vast majority of consumer transactions are carried out in cash, the lower VAT rates would be an added incentive for many Greece to switch to electronic money.
Under the new system, the card-issuing bank shall withhold the VAT tax and hand it over to the state while paying the trader the net value of his sale.
In other words, the Greek banking system will take over the job of tax collector to stop rampant tax evasion by businesses great and small.
According to unofficial finance ministry estimates, some 200,000 enterprises have stopped filing VAT declarations altogether in the past 6 months of a deepening recession, thus depriving the state of 1.8bn euros in lost VAT revenues.
A recent OECD study showed that Greece fails to collect 30 percent of VAT charges compared to an EU average of 12 percent.
Finance ministry officials say that the measure is largely ready to be launched as early as January 1 if the political decision to ratify it is taken before New Year’s Day.
This would work conjunction with the implementation of an existing law which requires that all transactions above the sum of 1,500 euros be settled by credit or debit card and/or bank cheque as from January 2012.