Monday, February 15, 2010

The IMF Bearing Gifts

As focus continues on the Greek financial crisis, it should be noted that this is for the most part a crisis of the government sector of Greece, and not the entire Greek economy.

A huge sector of the Greek economy is doing just swimmingly, thank you.

In other words, the real "problem" in Greece for many EU members is the large sector of Greece that remains one of the last vestiges of total freedom. Most estimates put that somewhere between 20% and 25% of the Greek economy is in the GUE, i.e., it is part of the Greek Underground Economy that is untaxed and unregulated. If the Greek government could get its hands on part of that cash flow, EU thinking goes, the crisis would disappear (Or at least until the Greek government over spent and over committed to spend that cash flow)

I suppose one does not need to warn Greeks about outsiders bearing gifts, but all this talk about the IMF coming in to Greece to provide "help" is about the IMF coming in and designing financial structures so that the GUE will be no longer. It is about IMF agents designing regulations so that GUE businessmen will have to pass through tax tolls, just like individuals in other countries where smiling IMF agents have passed through and are justifiably hated.

1 comment:

  1. Very clever Wenzel. Perhaps the Greeks can avoid the IMF trojan horse but can they make a stand like at the battle of Thermopylae when their own government seems to be against them?