Continued from Part One.
The debt problem in Greece isn’t just a case of unpaid tax, although a higher tax take would obviously assist meeting interest payments. Since joining the EU, the Greek public sector has become bloated out of all proportion to the country’s ability to pay. When allowing for the cost of living, Greek pensions are considerably more generous than Germany’s. A BusinessInsider article lists some differences:
The fact is Greeks have rapidly become accustomed to a level of benefits and low or non-existent taxes that the rest of Europe, even immensely wealthier Germany, does not enjoy.
Are the Greeks objecting to belated attempts by George Papandreou’s government to right these wrongs? You bet they are, with riots on the streets and almost daily protests. The burden will likely continue to fall on the few rather than the many, and individually you can’t blame the people for the current state of affairs — successive administrations have allowed this catastrophe to come about. The worry in Berlin, Paris and Brussels is that the pain will be spread much more widely than the benefits ever were.