Anyway, Mr Thomsen did manage to say at least something interesting. When asked whether he thought there was room for tax rates to be reduced he said, “I certainly agree with the government, with the Prime Minister that tax rates in some areas are much too high and that it should be an objective to reduce them... Now that should be done without jeopardizing bringing the surplus to 4.5% as we talked about...So I think key to achieving this is above all improving tax administration. If one can make sure that everybody pays taxes that the well-off also pay taxes and not just the wage earners and the pensioners who are easy to tax, if one can get this broadening of the tax base, then one can also reduce the rates in the long run, and we are fully behind that.”
In short, the only way Mr Thomsen can see for Greece to reduce the economy-strangling taxes that have imposed by austerity is, er, more austerity - or a ‘broadening’ of it to use his word. That the 4.5% of GDP target for a primary surplus from 2016 onwards might be insane is of course unthinkable. That target, bonkers as it is, must be met and cannot be questioned. Now if the government can meet the eye-watering target and at the same time rejig the tax code somewhat to balance the burdens, well Mr Thomsen is ‘fully behind that’.
The situation is akin to Thomsen telling the government that its donkey has to haul an enormous boulder up a hill. When donkey’s hind legs snap, Mr Thomsen is ‘fully behind’ splitting the boulder in two and placing half of it on the donkey’s head.
That isn’t of course to say that the rich should not pay their fair share - of course they should. But it is grating to be told that ‘everyone must pay their taxes’ in order to meet a ludicrous target promoted by a well-off man who… pays no taxes (none, just like IMF head Christine Lagarde).
In other words, it is do as I say, not as I do.
Similarly Mr Thomsen is also very happy with the concept of the public sector becoming more ‘performance oriented’ with wages linked to output. And it sounds like a reasonable concept - for everyone excluding the IMF, of course. For regardless of how many predictions, forecasts, and estimates they get wrong with disastrous results for millions, somehow their analysts never seem to lose their jobs or have their (tax-free) wages reduced. Just today it emerged that the tax hike on heating oil – for which the troika was very much directly responsible – has been a complete and utter failure, actually resulting in a 400 million euro fall in revenue (link in Greek) as demand collapsed. All it achieved was shivering citizens, school closures, and the return of 1980’s levels of smog to Greek cities as families took to burning wood in their attempts to keep warm (sometimes with fatal consequences). But far from anyone of the troika actually being held accountable, it would be a miracle if even a token apology was extended.
For while the IMF and troika seem very keen on improving accountability for others they have no desire to apply the same standards to themselves. Why should they given their unshakeable conviction that they can do no wrong?
This mentality is also clear in the latest IMF report which refers repeatedly to the ‘adjustment fatigue’ of the Greeks which is identified as a ‘growth risk’. With this deft turn of phrase popular anger at the troika’s policies which have undeniably contributed to a near full-blown depression is reframed as simple tiredness. It is the Greeks who are flagging, is the subtext, not the policies which are wrong. The troika is a strict but fair gym coach while Greece is the out of shape smoker who needs to suck it up and get with the programme.
The IMF report acknowledges that Greece will have a tough time meeting the target of 4.5% primary surplus in 2016, yet doesn’t entertain for a second the possibility that the problem might be more with the target and less with the Greeks. Meanwhile Mr Thomsen is happy to talk about everyone’s taxes except his own.
But before a populace of which 27.8% are currently living the humiliation of being unemployed, the troika could stand to show a little humility of its own.
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