by Alen Mattich
Wall Street Journal
June 17, 2011
In return for the price of yet more loans, the International Monetary Fund, the European Union and the European Central Bank are looking for the Greek parliament to legislate another round of austerity.
Judging by the public outcry and crumbling political will, its ability to do this is by no means certain. But even if the Greek government was to push through another €80 billion or so of cost cuts, tax increases and asset sales, investors would have to believe these can be implemented. And this is a big ask.
Take taxation. Like every other European country, Greece has volumes of statutes on what’s taxable, who’s liable and how it’s to be collected. But these aren’t very meaningful in a society where evasion (never mind avoidance) is endemic, not least because of the bribery culture among bureaucrats and tax collectors. So taxes are imposed but not collected.
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