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Don't you get it? This is EXACTLY why Greece and other countries are in such a bad way these days! Their prices are far too high for the economy to be competitive! Those other countries have gone through structural reforms to make production of these items far cheaper. All you are doing by posting these statistics is proving how bad the Greek economy is.
It has nothing to do with mythical "taxes".
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Sure its other things too,but taxes are also a variable playing a role to this.
Some of the current tax rates in Greece are the highest in the EU.
It's not the only thing adding to the situation,but surely its an important factor.
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The who point of the EU is that there are NO protectionist measures between countries, and Greece and the other PIIGS are suffering not because other countries are squeezing them, but because their economy is uncompetitive! The fact that Greek products are so expensive is the fault of the Greek government and (to a lesser extent) the producers in the country. Supply side reforms are needed to reduce the power of the trade unions and to KEEP WAGES LOW in comparison to PRODUCTIVITY. Unions are a great thing, but once they start demanding wages that far exceed the productivity of their workers then your country will be on a deadly spiral downwards.
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The problem is that there is productivity. Products do get produced,they just aren't sold. You might think that prices are depended in the amount of products produced,but that's not the case,at least for Greece.
Actually lots of food specific products are wasted because best before day ends before anyone buys them.
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Greek products are uncompetitive (and therefore the economy weak) because workers are unproductive and their wages are too high- meaning that the end product they produce is vastly more expensive than in other countries.
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It's not as simple as that.
You say that wages are too high,but the average wage is just 600 euros,and the average Greek works 10 to 12 hours a day,6 days a week.
Honestly,600 euros aren't that much of a high wage,the buying capability of this money isn't that high. It's just enough for a month's apartment fee,electricity,water and telephone bill. There's barely any money left for food or new clothes or entertainment.
The reason people keep living in houses with food,is because of solidarity between the community. 30 year old people living with their parents..
Relatives with better wages aiding those with economic problems...
If the average wage is so low you can't even secure the very basic needs for
living like a roof above your head,food,electricity,water and a few clothes, you really can't say that wages should get even lower.
It would only make sense if the prices of goods where reduced too at the same time,but go tell that to the greedy businessman next corner,and he will send you to hell.
There is an unwritten law in the Greek market and that is: "Prices never drop". That's how Greek businessmen think. And that way of thinking is because in the past the Socialist governments hand-holded the market and decided everything,the government would decide how much a business should charge for a product,how much a business should pay a worker etc.
But Greece joined the free market unprepared. I'm not saying free market is a bad thing,but in order for it to work properly,businessmen need the right education.
And if the majority of what constitutes your industry are small family shops,mostly owned from 50+ year old people that for all their lives got used to have the hand-holding of the state,and now are too egoist and greedy to decide to drop their prices,that's what you get.
I've read on Wikipedia that usually when a non-free market country decides to join the free market model,there is usually a transitional period that could last up to 10 years max,in which the government slowly changes the rules and laws one by one,while running a campaign to inform and educate businessmen like small family business owners with seminars.. Well Greece never had a transitional period,it all changed in a single day,and there where no informative campaigns or anything.
Out politicians hasted to do everything the quickest they can,so we have the standards to join a variety of international organizations.
So a big part of the Greek problem actually is that a large chunk of Greek businessmen is still running their businesses like they did 20 or 30 years ago,like we are still in the socialist,partly controlled by the government market era. But the random average businessman like that won't believe me if I told him that he has to lower his prices,even for his own good.
He would just say to me "I'm XX years in the business,I know how to run a business,it's not my fault that my business isn't profitable,it's other's fault".
He would have to listen to someone like the government to get convinced that he MUST lower his prices.
But the government doesn't give a s***t,the parliamentarians are nothing but lazy slackers that are too bored to think what they should do for the country themselves,and just wait for the EU to tell them what to do,and just sit until the EU says something,so they can write their signatures and say OK.
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You have already posted statistics proving this. Greek products are more expensive. That is why they are in such a bad way. The average consumer always buys the cheaper product, and if the Greek government wants to fix the economy then it has to solve the relationship between wages and productivity. What that means is Greek workers need to produce more goods for less money- call it austerity if you want, it has to be done. And yes, it will be very painful for the country, but it has to happen if the Greek government wants to fix their economy.
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The workers are already working enough and had their wages lowered. 10 to 12 hours a day for 600 euros is already on the extreme.
It's the business owners the next who should make a move,and lower their prices. Bad thing is they are too stubborn and greedy to do that,and the government doesn't do anything about that,partly because they really don't care about it,and partly because telling businessmen to lower their prices would be considered anti-free market move.
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There are no mythical taxes imposed on Greek goods that are doing this. None at all. This is a national problem that can only be solved by the Greek government and it's people.
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Mythical no,but you have to agree that 25% VAT on absolutely EVERYTHING is too much.
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That is because Greek companies are unable to sell things at a cheaper price than imports. The Greek economy is uncompetitive.
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It truly is.Very uncompetitive .
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as I said before, THIS ISN'T ABOUT TAXES. The Greek economy is in such a state because their economy is uncompetitive- wages are too high in comparison to productivity, meaning that Greek goods are far too expensive. When you put a country like Greece in a monetary union with a country like Germany (that has comparatively lower wages and a higher productivity), then a crisis like what we see now is inevitable.
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Taxes are not the primary factor,but do worsen the situation,because they reduce the buying capability of money,causing people to buy less stuff,leading business to have less costumers and thus less profits.
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No, the EU is telling Greece to restructure it's economy, and the massive bailouts were supposed to help do this.
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Actually the huge amounts of bailout money Greece received didn't helped at that department. All this money where spent so Greece can pay back some of its old debt and replace it with new,because the debt from the old loans had very high interest rates,and the newer loans have lower interest rates.The only thing that changed with the IMF and EU loans Greece took,is that now Greece's debt has lower interest rates.
Greece takes new loans to pay back its old loans,so those who loaned the money doesn't complain that Greece doesn't pay back,with the hope that Greece's ratings on Standards&Poors and other organizations like that will get better,so new investors will come in.
But honestly,investors doesn't come to Greece because tax rates are too high. For 20+ years Coca Cola had a factory in Greece where it produced not only for Greece,but for the South Europe in general,the factory was producing enough to satisfy the needs of the Balkans too.
When the first austerity measures pack was agreed to be applied to Greece, Coca Cola left and now they have their factory in Bulgaria.
The austerity measures scare investors away,and Merkel is too blind to see that.
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Would you be able to tell me how much average wages have fallen in the past few years?
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Average wage dropped from 800 euros to 600 euros. This is a 25% reduction.
At the same time the annual income tax raised from 25% to 30%,and VAT raised from 20% to 25%
Special tax for alcoholic beverages raised from 15% to 30%
Special tax for tobacco products went from 45% to 50%
Oil tax was also raised,I don't remember the exact percentage rate, but the average gasoline price of 1.2 to 1.3 euros per liter,now has jumped to 1.7 to 1.9 euros per liter.
No drops where applied to good's prices at all,the opposite happened actually and goods got even more expensive each time a tax rate was raised up.
I think it's like we are in a maze and can't get out!
