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DIW researchers Kritikos : Greece has lost years

How the images repeat: the end of 2014, visited Chancellor Merkel to their Greek counterparts Samaras congratulated him on the completion of the Greek crisis and praised the efforts of the Greek people. At the beginning of 2019: Merkel, Tsipras visited the Greek crisis congratulates him for termination, and honors... in the middle, four lost years. After half a year of full riot against Brussels and Berlin, capital controls, and other terrors of Greece in the year of 2015 had to record a program in the amount of 86 billion euros. In return, the Greek government had to pensions again, as well as expenditure in health and education drastically cut, while it has wound up to increase the revenue the tax screw.

An example: self-employed, taking a year 40000 Euro, a load limit of 85 percent exposed to, in addition to the previously paid value added tax of 24 per cent from income tax, social security contributions and the solidarity surcharge. Even worse it is for start-UPS with first-time revenue in this amount, you have to pay taxes in advance for the following year in the same amount. For good running Start-ups with no revenue to stay in the first year left. Innovative Startups are not just those who have a perspective for the future brought into the country. So you have a Foundation, these black or leave the country.

The damage has the private sector

Even when the rehabilitation of the state is managed to budget, with great anguish, have been moved to the loads in the private economy. The production of the Greek company is broke. The has high unemployment, especially among young people, poverty among the less well-educated, to emigration of well-educated people. In addition, the private debt is growing in Greece massively. About 40 percent of all Bank loans are irregular. Similarly, there is tax outstanding, around € 100 billion – no wonder, with the tax rates. Also, the state owes to private households, overpayment of taxes and invoices –six billion.

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In the result there is hardly any investment in Greece. The distrust of the government is large, the old well-known structural problems remain. Over-regulation, over-bureaucratization, and the lame justice do its part, the views of investors to other countries.

liquidity buffers are a poisonous gift

The reform process in Greece is also not successful after three rescue packages. In order to conceal the, have cushioned the creditors, the Transition from the last rescue package with a liquidity buffer of EUR 15 billion in the next two years, no state bonds will be issued. As it turns out, is a Danaergeschenk. Such buffers serve to be only in an emergency, used – their use is a negative Signal for the markets. However, it is expected that the current government will fall back in the face of interest rates of 4.3 percent for Greek Bonds on this buffer.

The next government – likely to be below the conservative Mitsotakis – then has the choice between Scylla and Charybdis. Either they borrow money at high interest rates in the market, which will not be given the high public debt and low growth rates on a sustained basis, or apply for a line of credit under the umbrella of the ESM. It would be in Greece as the fourth rescue program and as a re - "subjugation" – it would trigger a political earthquake.

Greece's economic Situation is reminiscent of a shaky house of cards. However, all of the don't care policy. Tsipras evokes a growing economy, a meager two percent in 2018, and in 2019 is in this situation. And Chancellor Merkel has been interested in during your current Athens-visit at all for there to be any friendship with Tsipras more for the name dispute with Macedonia as for the malade Greek economy. The move could backfire.

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Markus Bernath

Alexander Kritikos - Director of research at the German Institute for economic research (DIW Berlin) and Professor of Economics at the University of Potsdam.

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