Monday, February 22, 2016

Will the IMF, World Bank and ECB Force Greeks to Stop Using Cash?

By Tyler Durden

While the "developed world" is only now starting its aggressive push to slowly at first, then very fast ban the use of physical cash as the key gating factor to the global adoption of NIRP (by first eliminating high-denomination bills because they "aid terrorism and spread criminality") one country has long been doing everything in its power to ween its population away from tax-evasive cash as a medium of payment, and into digital transactions: Greece.
The problem, however, is that it has failed.
According to Kathimerini, "Greek businesses are not ready for the expansion of plastic money through the compulsory use of credit and debit cards for everyday transactions."
Unlike in the rest of the world where "the stick" approach will likely to be used, in Greece the government has been more gentle by adopting a "carrot" strategy (for now) when it comes to migrating from cash to digital. The government has told taxpayers that they will have to spend up to a certain amount of their incomes via bank and card transactions in order to qualify for an annual tax-free exemption.
This appears to not be a sufficient incentive however, as a large proportion of stores still don’t have the card terminals, or PoS (Points of Sale), required for card payments, while plastic is accepted by very few doctors, plumbers, electricians, lawyers and others who tend to account for the lion’s share of tax evasion recorded in the country.

Almost as if the local population realizes that what the government is trying to do is to limit at first, then ultimately ban all cash transactions in the twice recently defaulted nation as well. It also realizes that an annual tax-free exemption means still paying taxes; taxes which could be avoided if one only transacted with cash.
For the government this is bad news, as the lack of tracking of every transaction means that the local population will pay far less taxes: a recent study by the Foundation for Economic and Industrial Research (IOBE) showed that increasing the use of cards for everyday transactions could increase state revenues by anything between 700 million and 1.6 billion euros per year, and that the market’s poor preparation means that the tax burden has been passed on to lawful taxpayers. As a reminder, in Greece, the term "lawful taxpayers" is not quite the same as in most other countries.
What is more surprising is that according to data seen by Kathimerini, PoS terminals in Greece amount to just 220,000, and that despite the fact these were effectively forced on enterprises with the imposition of the capital controls, an estimated half of all businesses do not have card terminals.
Almost as if the Greeks would rather maintain capital controls than be forced into a digital currency by their Brussles overlords.
According to Finance Ministry calculations , the number of terminals the market requires for a satisfactory geographical coverage in the basic categories of small enterprises and of the self-employed to 450,000-500,000, which appears impossible for 2016.
As for consumers, the increase in the number of debit cards after the government imposed the capital controls has brought their total to 1.7 million across Greece.
And yet, despite the aggressive push to force everyone out of physical cash and into digital money, the experiment has so far failed. How long until the IMF, Troika, or Quadriga or whatever it is called these days, uses Greece as the Guniea Pig for the next monetary experiment, and "advises" the Syriza government that if it wants the bailout money to flow, it will have to do away with all physical cash within its borders. A successful implementation, first in Greece, would then mean that the global decashification process can continue in other western nations.
The above originally appeared at Zero Hedge.

1 comment:

  1. One thing to love about China. In many cities, not Beijing, Shanghai or Shenzhen, thousands upon thousands of RMB transactions take place every day. Show most establishments a debit or a credit card: Automatic Dear in the headlights stare.