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‘Austerity in Greece? Sure, And There’s Snow in Mykonos Too’ Reports Forbes Magazine

Nathan Lewis, economic editor at American Forbes magazine, reports that austerity, with which Greece is struggling, should be referred in quotation marks, suggesting there is not any. He further compares this financial situation with snow on Mykonos, the Aegean sunny island that attracts many visitors each year.

By reporting on the several billions that Greece spends and owns to lenders since 2009, he comments that “there is no meaningful decline in government spending. Spending has been higher in January-May 2012 than it was in the same five months of 2011, 2010, or even in 2009.”

Mr Lewis adds also that tax revenues have decreased in Jan-May 2012, in contrast to corresponding revenues in 2009 and 2010.

He also reports that the government cut some high-profile services but not to increase revenues. Actually, they tried to show Greek citizens that they support them “by giving the impression that dramatic changes are happening.” 

But for the Forbes contributor the problem lies in the fact that the government has increased the already high taxes. This is forcing Greek businesses  to migrate to neighboring Bulgaria because it is an EU’s member state but has many free trade advantages. Furthermore, Bulgaria’s income tax rate amounts to 10% and corporate tax rate to 10%, while in Greece VAT is higher, at 23%.

He advises Greek politicians to adopt Bulgaria’s flat tax system which would bring in higher revenue more than any “austerity” attempts. “It would work again today in Greece,” he concludes.

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