Greek Protesting Crisis Management

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Greek Protesting Crisis Management

International Monetary Fund warns Greece on Monday to collect taxes better, to implement a deeper spending cuts, and to avoid raising taxes. The warning that is meant to help the European country survive the crisis comes a few days before Greece meets with IMF and European authorities to convince them to release the next 8 billion Euro instalment of EU-IMF loan.

Greece needs this money by the next month to avoid defaulting on its debt. The condition is that the Greece reduces its deficit, which it intends to do by cutting the size of the state sector redundancies, pay cuts and privatization.

IMF said that cuts were of extreme importance, because the state apparatus is very large, but that they must be followed by measures that would foster economic growth.

Closing down the inefficient state entities, and the reduction of the large state sector workforce are vital for assuring the economic survival of Greece. Generous wages of the workers in the state sector will receive from now on lower salaries.

Greece proposes an emergency property tax that would be paid through the household energy bills, an idea that the IMF did not agree with. The IMF is of the opinion that under the circumstances the country should not impose higher taxes on the limited tax base.

They also say that Greece cannot save itself by means of spending cuts alone, but by an improved collection of taxes rather than by introducing new taxes.

European finance ministers also told the Greek counterpart that the property tax is not good, and that in times of recession new taxes aggravate unemployment and the social tensions.

EU and IMF agreed to a 110 billion Euros bailout for Greece last May, while another 109 billion Euros need ratifying from some parliaments in the eurozone.

German Constitutional Court had to pass a sentence by which the bailout on Greece was legal. The high court said that it was legal for the government to do so, but that it needed the sanction of the parliament for that.

There are many opinions on the situation in Greece, many of them converging on the idea that Greece, and other countries in its position, should exit the eurozone in order to strengthen its national currency.

There is an opinion, expressed even by one of the German people who filed the complaint, that eurozone should structure itself on at least two tiers, one for the strong countries who can sustain the euro, and a second one for the vulnerable countries, who could revert to their national currencies or could have a “lighter” euro.

There is another theory that gains momentum in the world of economic experts, by which the European countries should hand over their sovereignty to a central European government, so that it may make the decisions necessary to save Europe.

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