The Greek government is making it a top priority to punish businesses which employ people. Specifically business which employ people off the books stand to face a 10K Euro fine for every person they employ.
Instead of the government acknowledging that the economy is in free fall and that people and businesses are having to do what they can to make ends meet, they decide to not only stop people from earning a wage but also punish the employer to such an extent it may put them out of business and create even more unemployment.
You could argue that employing people off the books is not correct but surely, in an economy where unemployment is approaching 30% of the workforce it is not the time to be putting even more people of out of work and surely it is not the time to be threatening even more businesses with closure.
This policy is bordering on the psychotic.
The government states its reason for taking such abusive action is that people are taking advantage of the social security system. One presumes that they mean people are claiming benefits and working.
Okay, this is clearly not helpful to anyone.
But surely the logical course of action would be to allow people to opt out of the social security system in return for being allowed to work. This way the person gets to work, the employer gets cheaper labour, the government does not have to pay out unemployment or health benefits. Surely this solution is a win-win situation for everyone.
Of course you will never see a government going for this solution, whether it be the Greek government or the any other government.
To allow people to work without the government taking a cut sets a dangerous precedent. There is a very good chance that everyone would decide to opt out of the government benefit programmes and then where would the government be?
A half way solution would be for the government to say anyone earning less than ten thousand Euros a year could opt out only, that way at least the poorest in society get the chance to work. But unfortunately even the most “socialist” of governments will not even do this and surely this is the most damning indictment of any government that claims it wants to look after the least fortunate in society.
For any government that claims to want to look after the least fortunate would logically give the least fortunate the opportunity to work tax-free.
The Greek crisis is a very useful case study for the behaviour of governments when they encounter funding problems.
The first priority for any government is to pass the costs of their mismanagement onto other people. Their first target is those who receive benefits and the second target is the private sector.
The third target is then to cut the wages of government workers. It is impossible to cut the wages of government workers first as the people may leave the government and seek work in the private sector leading to the government to get smaller which is the absolute last thing any government wants to do.
The fourth target, and this stage only gets enacted when things have got really bad, the fourth target are front line staff, ie staff which the public actually interact with.
It is important to cut front-line staff as this serves to poison the opinion of the public against government cuts. When people start seeing fewer teachers and class sizes increasing the first conclusion they come to is that government cutbacks are bad which only serves to reinforce their support for the first three targets.
Targeting of those receiving benefits also serves a psychological effect of making those who push for government cuts seem cruel.
This is the way governments decide to cut back throughout the world and of course it is completely backwards.
The first cuts should be made to departments which the general public do not have any contact with. For example departments of trade/commerce. The average business owner has no evidence as to the activities of this department despite this department costing an inordinate amount to run.
Another example of an invisible government department is the department of tourism. Even those business directly involved in the tourist industry have no contact with this department.
To state the obvious is it the invisible government activities should be the first to be cut and not the services which people depend upon the most.