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there are more Porsches in Greece than taxpayers declaring 50,000 euro incomes

MrMatisse

http://blogs.telegraph.co.uk/finance/ianmcowie/100012894/fast-cars-and-loose-fiscal-morals-there-are-more-porsches-in-greece-than-taxpayers-declaring-50000-euro-incomes/

And we sit here and suck it up while they live it up......:mad:

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hangon

KerranJast wrote: »

Vanity fair as a source,C'mon you are joking!:)

The author of that article Michael Lewis is one of the most reputable and insightful financial authors going. He's responsible for The Big Short, Moneyball and The Blind Side amongst others.

Also Vanity Fair is regarded as having some of the best feature articles in US print now. I know all that most Irish people know it for it controversial photospreads but they've some of the best contributors in the business.[/QUOTE]

Hi kerranJast sorry whatever is going on with the 'Quote' system on boards ATM i did not realise you had replied.
the thing is who can we trust anymore,i am a Radio/TV News junkie and listen to talk radio a lot as well as often watching the TV News channels.
it has gone on so long now that people up to their necks in Diploma's in Economics etc differ so much they could be replaced by a crystal ball.
i am not joking when i say lots i know are living in fear.
there are no discernable 'experts' anymore.:(

Wertz

blorg wrote: »

The article specifically claims there are more Porsche Cayennes registered there than people declaring income over €50,000, not Porsches in general.

No, the article (which I've now read properly) has specifically said that:
“A couple of years ago, there were more Cayennes circulating in Greece than individuals who declared and paid taxes on an annual income of more than 50,000 euros.” and goes on to say that currently in the regional capital of Larisa, there are more Cayennes (horrible car IMO) per capita than London or NY, which is odd given "that farming is not a flourishing sector in Greece, where agricultural output generates a mere 3.2 percent of GNP in 2009 (down from 6.65 percent in 2000) and transfers and subsidies from the European Commission provide roughly half of the nation’s agricultural income,” larisa being situated in a region mainly reliant on agriculture...

http://www.athensnews.gr/portal/9/49503

So the Telegraph may have made a headline out of it, but the underlying facts according to Polemarchakis are accurate...

[edit] Sorry you replied as I did, Blorg... personally I don't think the article quoting him is misrepresenting the facts as they are set out by the economist. I'll grant you that there are many other things they could be picking up on but to the less informed, it's an interesting way to illustrate one of the underlying problems about the Greek economy.

hangon

Bottom line is that apparently a lot of people are looking for someone/thing to blame and punish right now.
History shows that punitive measures against a Nation will always lead to Rebellion at best, War at worst.

LittleBook

KerranJast wrote: »

The author of that article Michael Lewis is one of the most reputable and insightful financial authors going. He's responsible for The Big Short, Moneyball and The Blind Side amongst others.

Also Vanity Fair is regarded as having some of the best feature articles in US print now.

He also did a great article on what happened in Ireland for the same magazine (as I'm sure you know).

http://www.vanityfair.com/business/features/2011/03/michael-lewis-ireland-201103

blorg

@Wertz- they quote Polemarchakis, but also in several other places in the article repeat as fact, that there are more Porsche Cayennes in Greece than people paying tax on incomes over €50,000. Their whole article is built around this astounding statistic. But it is just simply not true.

Telegraph article wrote:

There are more Porsche Cayennes registered in Greece than taxpayers declaring an income of 50,000 euros (£43,800) or more

^ Not true

This is the original source that they get the quote from. It is not an academic article; it has no citations. It is one of those fluff bulletins universities send around with a mix of opinion pieces and research summaries from their staff.

The rest of what Polemarchakis says in that piece is entirely reasonable and sensible. My personal take on it, especially if you read the end where he uses an allegory about Egyptians resorting to medicine men, is that he was using hyperbole, a figure of speech where you exaggerate for dramatic effect. I do not believe that he meant the statement "there were more Porsche Cayennes registered in Greece than taxpayers declaring an income of 50,000 euros" to be taken literally.

But the Telegraph take it as fact and run with it. It is the responsibility of a newspaper to apply basic fact checking and common sense before they pick a quote out of context and then run entire articles around something that someone said as a figure of speech (in fairness to them, it is actually a blog post by their finance editor rather than an article.)

The Larisa stuff is not cited either; the source I referenced earlier shows that that Greece has a lower Cayenne ownership on average than other EU countries. There is 1 Cayenne for every 49,000 Europeans with 1 for every 55,000 Greeks. I would put this uncited statement in the same category, of hyperbole.

It was commonly said that Martin McGuinness assassinated Sean Gallagher in the last debate. What the Telegraph have done here would be akin to their then running an article saying that Martin McGuinness has rejoined the IRA, they are back in business, and that he has literally and personally murdered another presidential candidate, on live TV. And that he is now dead. Literally. And his funeral service will be on Tuesday at 3pm.

Johro

Oafley Jones wrote: »

Greece should never have never been allowed into the euro and corruption and tax evasion is rife but that article is tabloid crap of the highest order.

Yes it is. EU leaders are busy pointing the finger now and some are saying that Greece, in looking for access to the EU, presented a much rosier picture of their financial status.
I for one can't believe that the EU leadership would have just taken them at their word, surely they would've wanted to see the books if this was a condition that had to be met.
The truth is that EU leaders were fully aware of Greece's rocky financial status (along with its other problems) but at the time were happy to grant them access, no doubt looking forward to broadening trade in a growing European Union. It's just that now everything's gone south they need a distraction, someone to blame, to take attention away from the fact that they were already aware that with or without Greece, there isn't enough money available to bail out the EU economy. End of.
As for the Greek president giving his people a referendum, in the birthplace of democracy, it's kind of ironic that this is frowned upon by our so-called democratic leaders.

Sonnenblumen

MrMatisse wrote: »

Bloody Greeks.

Yeah whilst your ancestors were still living in trees, the Greeks were reading and writing. Not much has changed since.:o

Ste_D

Johro wrote: »

Yes it is. EU leaders are busy pointing the finger now and some are saying that Greece, in looking for access to the EU, presented a much rosier picture of their financial status.
I for one can't believe that the EU leadership would have just taken them at their word, surely they would've wanted to see the books if this was a condition that had to be met.
The truth is that EU leaders were fully aware of Greece's rocky financial status (along with its other problems) but at the time were happy to grant them access, no doubt looking forward to broadening trade in a growing European Union. It's just that now everything's gone south they need a distraction, someone to blame, to take attention away from the fact that they were already aware that with or without Greece, there isn't enough money available to bail out the EU economy. End of.
As for the Greek president giving his people a referendum, in the birthplace of democracy, it's kind of ironic that this is frowned upon by our so-called democratic leaders.

From what I understand Goldman Sachs had a lot do to with this. They were trusted by the EU to effectively audit Greece, what they actually did was line their own pockets in return for getting Greece into the EU.

In my opinion the Greek finance department in tandem with Goldman Sachs make the Irish government look like financially savy saints.

Johro

Ste_D wrote: »

From what I understand Goldman Sachs had a lot do to with this. They were trusted by the EU to effectively audit Greece, what they actually did was line their own pockets in return for getting Greece into the EU.

If that's true, it explains a lot. What we can be sure of is we're not getting the real story.

alastair

More porsches than tax-paying high earners I dunno about, but surely they've far too many ferries and islands for their own good? Notice-boxes the lot of them.

kleefarr

If this is anything to go by, then they should burn...

Allegedly..

This sheds some light on why they are in such a mess.

A "bit" (!) long but worth the read . Who are the idiots them or us.

Even on a stiflingly hot summer's day, the Athens underground is a pleasure. It is air-conditioned, with plasma screens to entertain passengers relaxing in cool, cavernous departure halls - and the trains even run on time.

There is another bonus for users of this state-of-the-art rapid transport system: it is, in effect, free for the five million people of the Greek capital.
With no barriers to prevent free entry or exit to this impressive tube network, the good citizens of Athens are instead asked to 'validate' their tickets at honesty machines before boarding. Few bother.

Cracking up: The Euro is at risk of collapse because of the Greek financial crisis
This is not surprising: fiddling on a Herculean scale — from the owner of the smallest shop to the most powerful figures in business and politics — has become as much a part of Greek life as ouzo and olives.
Indeed, as well as not paying for their metro tickets, the people of Greece barely paid a penny of the underground’s £1.5 billion cost — a ‘sweetener’ from Brussels (and, therefore, the UK taxpayer) to help the country put on an impressive 2004 Olympics free of the city’s notorious traffic jams.
The transport perks are not confined to the customers. Incredibly, the average salary on Greece’s railways is £60,000, which includes cleaners and track workers - treble the earnings of the average private sector employee here.

The over ground rail network is as big a racket as the EU-funded underground. While its annual income is only £80 million from ticket sales, the wage bill is more than £500m a year — prompting one Greek politician to famously remark that it would be cheaper to put all the commuters into private taxis.
‘We have a railroad company which is bankrupt beyond comprehension,’ says Stefans Manos, a former Greek finance minister. ‘And yet, there isn’t a single private company in Greece with that kind of average pay.’
Significantly, since entering Europe as part of an ill-fated dream by politicians of creating a European super-state, the wage bill of the Greek public sector has doubled in a decade. At the same time, perks and fiddles reminiscent of Britain in the union-controlled 1970s have flourished.

Greek farce: Living it up in swanky harbour-side restaurants
Ridiculously, Greek pastry chefs, radio announcers, hairdressers and masseurs in steam baths are among more than 600 professions allowed to retire at 50 (with a state pension of 95 per cent of their last working year’s earnings) — on account of the ‘arduous and perilous’ nature of their work.
This week, it was reported that every family in Britain could face a £14,000 bill to pay for Greece’s self-inflicted financial crisis. Such fears were denied yesterday after Brussels voted a massive new £100bn rescue package which, it insisted, would not need a contribution from Britain.
Even if this is true — and many British MPs have their doubts — we will still have to stump up £1billion to the bailout through the International Monetary Fund.
In return for this loan, European leaders want the Greeks’ free-spending ways to end immediately if the country is to be prevented from ‘infecting’ the world’s financial system. Naturally, the Greek people are not happy about this.
In Constitution Square this week, opposite the parliament, I witnessed thousands gathering to campaign against government cuts designed to save the country from bankruptcy.
After running battles with riot police, who used tear gas to disperse protesters, thousands are still camped out in the square ahead of a vote by Greek politicians next week on whether to accept Europe-imposed austerity measures.
Yet these protesters should direct their anger closer to home — to those Greeks who have for many years done their damndest to deny their country the dues they owe it.

Clash: Protesters continue to riot in Athens
Take a short trip on the metro to the city’s cooler northern suburbs, and you will find an enclave of staggering opulence.
Here, in the suburb of Kifissia, amid clean, tree-lined streets full of designer boutiques and car showrooms selling luxury marques such as Porsche and Ferrari, live some of the richest men and women in the world.
With its streets paved with marble, and dotted with charming parks and cafes, this suburb is home to shipping tycoons such as Spiros Latsis, a billionaire and friend of Prince Charles, as well as countless other wealthy industrialists and politicians.
One of the reasons they are so rich is that rather than paying millions in tax to the Greek state, as they rightfully should, many of these residents are living entirely tax-free.
Along street after street of opulent mansions and villas, surrounded by high walls and with their own pools, most of the millionaires living here are, officially, virtually paupers.
How so? Simple: they are allowed to state their own earnings for tax purposes, figures which are rarely challenged. And rich Greeks take full advantage.
Astonishingly, only 5,000 people in a country of 12 million admit to earning more than £90,000 a year — a salary that would not be enough to buy a garden shed in Kifissia.
Yet studies have shown that more than 60,000 Greek homes each have investments worth more than £1m, let alone unknown quantities in overseas banks, prompting one economist to describe Greece as a ‘poor country full of rich people’.

Running battles: The riots are threatening to destabilise the Euro
Manipulating a corrupt tax system, many of the residents simply say that they earn below the basic tax threshold of around £10,000 a year, even though they own boats, second homes on Greek islands and properties overseas.
And, should the taxman rumble this common ruse, it can be dealt with using a ‘fakelaki’ — an envelope stuffed with cash. There is even a semi-official rate for bribes: passing a false tax return requires a payment of up to 10,000 euros (the average Greek family is reckoned to pay out £2,000 a year in fakelaki.)
Even more incredibly, Greek shipping magnates — the king of kings among the wealthy of Kifissia — are automatically exempt from tax, supposedly on account of the great benefits they bring the country.
Yet the shipyards are empty; once employing 15,000, they now have less than 500 to service the once-mighty Greek shipping lines which, like the rest of the country, are in terminal decline.
With Greek President George Papandreou calling for a crackdown on these tax dodgers — who are believed to cost the economy as much as £40bn a year — he is now resorting to bizarre means to identify the cheats. After issuing warnings last year, government officials say he is set to deploy helicopter snoopers, along with scrutiny of Google Earth satellite pictures, to show who has a swimming pool in the northern suburbs — an indicator, officials say, of the owner’s wealth.
Officially, just over 300 Kifissia residents admitted to having a pool. The true figure is believed to be 20,000. There is even a boom in sales of tarpaulins to cover pools and make them invisible to the aerial tax inspectors.
‘The most popular and effective measure used by owners is to camouflage their pool with a khaki military mesh to make it look like natural undergrowth,’ says Vasilis Logothetis, director of a major swimming pool construction company. ‘That way, neither helicopters nor Google Earth can spot them.’
But faced with the threat of a crackdown, money is now pouring out of the country into overseas tax havens such as Liechtenstein, the Bahamas and Cyprus.

Parliament: It could be all over for Greece, which is effectively bust from relying on EU cash from richer northern European countries
‘Other popular alternatives include setting up offshore companies in Cyprus or the British Virgin Islands, or the purchase of real estate abroad,’ says one doctor, who declares an income of less than £90,000 yet earns five times that amount.
There has also been a boom in London property purchases by Athens-based Greeks in an attempt to hide their true worth from their domestic tax authorities.
‘These anti-tax evasion measures by the government force us to resort to even more detailed tax evasion ploys,’ admits Petros Iliopoulos, a civil engineer.
Hotlines have been set up offering rewards for people who inform on tax dodgers. Last month, to show the government is serious, it named and shamed 68 high-earning doctors found guilty of tax evasion.
‘We will spare no effort to collect what is due to the state,’ said Evangelos Venizelos, the new Greek finance minister of the socialist ruling party. ‘We promise to draft and apply a new and honest tax system, one that has been needed for decades, so that taxes are duly paid by those who should pay.’
Yet, already, it is too late. Greece is effectively bust — relying on EU cash from richer northern European countries, but this has been the case ever since the country finally joined the euro in 2001.
Two years earlier, the country was barred from entering because it did not meet the financial criteria.
No matter: the Greeks simply cooked the books. Two years later, having falsely claimed to have met standards relating to manufacturing and industrial production and low inflation, the Greeks were allowed in.
Funds poured into the country from across Europe and the Greeks started spending like there was no tomorrow.
Money flowed into all areas of public life. As a result, for example, the Greek school system is now an over-staffed shambles, employing four times more teachers per pupil than Finland, the country with the highest-rated education system in Europe. ‘But we still have to pay for tutors for our two children,’ says Helena, an Athens mother. ‘The teachers are hopeless — they seem to spend their time off sick.’
Although Brussels has now agreed to provide the next stage of its debt payment programme to safeguard the count ry’s immediate economic future, the Greek media still carries ominous warnings that the military may be forced to step in should the country’s foray into Europe end in ignominy, bankruptcy and rising violence.
For now, the crisis has simply been delayed. With European taxpayers facing the prospect of saving Greece from bankruptcy for the second year in a row, some say even the £100bn on offer will pay off only the interest on the country’s debts — meaning it will be broke again within two years.
Meanwhile, there are doom-laden warnings that the collapse of the Greek economy could be the catalyst for another global recession.
Perhaps if the Greeks themselves had shown more willingness to tighten their belts and pay taxes due to the state, voters across Europe might not now be feeling such anger towards them.
But having strolled the streets of Kifissia, and watched the Greek hordes stream past the honesty boxes on the underground, it does not take a degree in European economics to know when somebody is taking advantage — at our expense.