So... Greece?

[lestatdark]

mrstickball said:

lestatdark said:

As an outsider, I do not condone the riots in Greece, mainly because I believe such behaviour is only going to hurt the country in the long run, and that's what Greece needs the least these days, but I do understand that the majority of the people rioting are fearful of the great changes that their country has to go through in order to become a viable market once again, or at least have enough funding to get back on track.

But you're right, such a large public sector is unsustainable. I may be wrong, but I heard that Greece's public sector was almost 80% of their total economical weight, which is, of course, not a viable solution. Simply put, you cannot (as a government) generate enough income to sustain such a massive working force in a country, even if you pushed taxes to an insanely high value and cut on every social support and spending. Also, (I might be wrong in this point too), isn't Greece's major sector the tertiary sector, just as Portugal? If we're struggling with such a scenario and our public sector is only 35%, you can just imagine the damage an 80%, tertiary sector based economy would do to a country. 

I'll explain why I think my values aren't completely correct (anyone from Greece is welcomed to help me and explain it to me). These values are the last ones I heard from an interview with the official greek ambassador here in Portugal, back when Greece was receiving it's first share of the international aid in 2010, so they might be a bit out-of-date or not completely accurate.

Greece's public sector is about 40% of GDP currently.

One discussion I was reading on another forum (which has a few economists among other people) talked about one of Greece's main problems is that their tax structure is very, VERY poor. Many people avoid paying or get out of it entirely, especially the rich, which is causing tax revenues to be much less than what it needs to be - coupled with a very expensive public sector, you get insane amounts of debt-to-GDP.

Sad times are ahead for those who willingly voted themselves pay raises and benefits. This goes for every country that has relied on such actions to keep power.

Thanks for making it more clear  

Also, do you know what was/is Greece minimal wage rates in the public sector? I know that it isn't near as low as Portugal's minimal wage (we have one of the lowest minimal wage rates in the entire euro region, which has only seen a 45 eur increase in 10 years, from 440 to 485 eur).

Portugal also used to have a lot of tax evasion until 5/6 years ago, mainly due to poor fiscal regulation and poorly trained technicians in the sector. We have improved a lot in that aspect, though we still have the best tax control yet (there's still some loop-holes in the system, and some disparities like the banking system having much lower IRC, IRS and corporate taxes than other systems). Unfortunaly, our economy problems lie in the money we dry out in the import market (it's just unviable as it is, we need to restart our national agriculture and industry) and failed government policies.

Plus, as i said to kowenicki, shifting to the Eur currency had a huge impact in the overall population's purchasing power. Almost every product (especially the essential ones), doubled in price when the Eur was implemented (for example, a 6-pack of milk, which costs between 3 - 6 eur, used to cost between 400 - 600 escudos, about 2 - 3 Eur). Coupled with an increase of the VAT and only a slight increase on the minimal wage, we had an over 30% drop in the purchasing power of the overall population. To put it simply, there has only been downsides since the introduction of the Eur.