How can one evaluate the Economic #Programme of the new #Tsipras Party (of E.L.A.S.)?
It’s very easy. And at the same time it’s very difficult…
It is “easy” because it is simply a rather superficial description of problems and an easy enumeration of fragmentary solutions of traditional left-wing, redistributive logic.
With grandiose wishes for major “restructuring”, which however remain wishes. Without any real reform perspective.
On the other hand, it is “difficult”, not simply because the numbers don’t add up , but because in the most critical “proposals” there are no numbers to add up. They are reminiscent of gold miners sifting through river water to find grains of gold. These are wishful thinking. It is not a Program. And in any case, it is not a “measurable” program in any way.
It is, therefore, a series of general statements – such as that primary production needs reconstruction – and a series of “magical” proposals , some of which are simply “wishes” and others “pious” (sometimes even impious) desires.
But “wishes” do not paint eggs. And “desires” do not reconstruct the economy , nor overcome chronic disabilities of the production model.
#Cinderella ‘s fairy godmother once managed to turn a pumpkin into a luxurious carriage. And the miracle only lasted until midnight.
No one else has ever managed to do it since…
- Take for example the program for affordable new “social” housing.
That is, let’s build another 50 thousand workers’ housing units. Where?
Obviously in large urban centers, Athens, Thessaloniki, etc.
In other words, where there is already a concentrated population, let’s bring others.
Where cement already dominates, let’s cement in what’s left.
Probably in already degraded areas, because they certainly won’t be built in Ekali, nor in Kifissia, nor in Glyfada…
But when you want to rebuild #primary production, you have to encourage people to leave Athens, to return to the periphery, to promote #decentralization.
And if you want to #rebuildAgriculture, Livestock, and Fisheries, you can’t gather more people in large urban centers.
No one can live in Athens anymore and no one wants to live in the provinces.
If you don’t break this vicious cycle, no problem will be solved. Not even the housing…
What is wrong with this sentence?
Quite simply, he is trying to increase the “supply” of residential properties , when there are hundreds of thousands of properties that are currently empty!
Don’t Tsipras’ staff know this?
The crucial and truly radical thing is to use the huge stock of housing that already exists and has fallen into disuse…
It’s cheaper, brings results faster, and has minimal impact on the environment. It doesn’t cement everything together.
Based on ELSTAT data, there are currently 6.6 million homes in Greece, of which approximately 2.2 million are empty, unused!
Of these , approximately 660 thousand are in Athens-Thessaloniki where there is great pressure.
And of these, approximately 170 thousand are estimated to be “vacant” and immediately available for residences under 70 square meters.
There are three times as many “empty” houses as the “new” ones that Tsipras wants to build. And the cost of renovating them is overall much less than building new ones.
Villages where the cost of renovation does not necessarily burden the state. It can be covered with a low-interest (subsidized) loan that will be amortized very quickly from rents. And thus cost the state much less and entire degraded areas can be upgraded.
That is, based on the “Tsipras Program” we will need over three years and 6 billion euros to increase the supply of housing by 50 thousand, while if we renovate the immediately available ones, we could, at a much, much lower cost , renovate three times as many within a few months!
So the problem is not whether Tsipras’ #HousingProgram costs 6 or 7.5 billion. The problem is that with much less money in much less time you can have three times as many houses available – from existing ones, not building new ones.
And in any case, the issue is to encourage the movement of people outside of large urban centers with generous incentives, both tax and loan.
All of this will cost much less and will serve multiple goals: decentralization, regional reorganization, etc.
Tsipras’ proposal essentially says build them new workers’ housing!
And he doesn’t wonder why, of the 50,000 houses built by the Workers’ Housing Organization before it closed in 2012, there are today hundreds that are closed and unused…
- Let’s move on to Tsipras’ other radical proposal, to tax the richest 1% of the population at 1% per year on their wealth. The so-called “Patriotic Contribution”.
And when they talk about Assets, they mean the total net assets (minus loans) including movables, real estate, investments in stocks, bonds, etc.
At first, they clearly hinted that they would also open the bank vaults. They were included in the old “asset list”, which the Tsipras government had established in 2017, never worked and they invoked it now.
Finally – with all their might – they clarified that they are not going to touch the boxes. And that the new #tax will replace corresponding taxes on property. That is, ENFIA…
And then… control was lost again. Because the 1% of the very rich in Greece – the 1% of Greek millionaires – is around 72 thousand. And if you take into account that the tax concerns households and not individuals (so the taxable base is larger) and that the property tax they already pay is deducted (so the expected “net” income is reduced), the total amount is around 2 million net taxable times 72 thousand times 1%!
A total of 1.5 billion at most. And by the time the asset register is prepared (2 to three years) the interested parties may have taken their money out or “hidden” it in corporate structures, etc.
In any case, the “Greek millionaires” can chase them abroad where there are no such property taxes.
In reality, they won’t find “clean” over half a billion.
This is a tax from the deep past. In 1990, there were around 12 countries in Europe that had such a tax. However, not for the richest 1%, for many more. Today it has been abandoned because it had serious side effects – capital flight, etc. – and because it is practically unenforceable. Of the 12 European countries in 1990, only three are left to apply it today – Norway, Switzerland, Spain.
Norway and Switzerland are NOT even members of the European Union! And Spain had abolished it, brought it back in 2011 due to the crisis, then it was left out and now most parties in their programs promise to abolish it there too.
It is an inefficient relic of the past. It is somewhat reminiscent of the “perpetual” bonds that Mr. Varoufakis wanted to issue in 2015. Which had financed the Napoleonic Wars in England in the early 19th Century, then returned briefly to finance the costs of World War I in the early 20th Century, and then were gradually abandoned.
Until our people here discovered them. And then they forgot about them too.
It seems like every ten years they get a #deja_vu and bring back something from economic prehistory, to show that they have… “fresh ideas”!
- Finally, the most interesting part of the Program: the reduction in electricity costs by 30%.
Be careful, it’s not impossible! But just two objections (for starters):
— First, it doesn’t tell us how it will be done. Because it can’t be done just by changing the contracts with the providers. Not even with cost subsidies – which already exist anyway.
Unless the various “regulated charges” and green charges are reduced and the Energy Exchange is completely changed, the price of electricity cannot be substantially reduced. And Tsipras’ Party – and its green commitments – do not let him see this. Nor let him say it.
A large part of the cost of electricity is such additional charges. And of the remaining cost, a large part comes from the pricing of the Energy Exchange. Which can be reduced!
Here we increased Renewable Energy Sources (RES) and instead of the price of electricity decreasing, it skyrocketed.
The Tsipras Party cannot say these things.
Because he wants it to look “green” – but not too much, as long as the cat is stepping on it…
— And then energy is not just electricity. It’s also fuel. They don’t tell us anything here. But accuracy goes to the entire economy and fuel costs. Which are largely taxes.
And Tsipras’ Party is inconceivable about requesting a reduction in over-taxation on fuels , just as it is inconceivable about requesting a reduction in over-taxation in favor of the “green fund” on electricity.
He promises to hit the mark, but he can’t even touch it.
All that remains for him is the reduction of #VAT only on “essential” items. To the lowest tier of 6%. I remind you that when #SYRIZA came to power, it found the VAT on food at 13% (where the #Samara government had lowered it) , raised it to 23% and then raised it to 24% along with the entire highest tier, which included many basic items. Where they remain to this day. And here comes the one who raised the VAT, when it was not necessary, promising that he will lower the VAT today, but only selectively. Because he does not want to touch overtaxation.
- It doesn’t really hit the cost of Energy as a whole, nor does it provide for a reduction in indirect taxes, because it has a redistributive logic. It wants to collect from the many, distribute them as subsidies and reliefs and create a customer base. Does this subsidy logic remind you of anything?
Restructuring the economy so that it works for everyone doesn’t even cross his mind.
He’s chasing how to “share” the pie every time, and he’s not concerned with how to steadily grow the pie…
Trapped in his leftist #ideologies (which aren’t so leftist anymore – but they remain ideology) he tries to show that he has become “systemic” and a “wise boy”.
Indeed, his numbers don’t add up. But that’s the least of it.
The main thing is that he doesn’t see the real problems, he proposes “solutions” that are outdated or unworkable, and if he were ever given the chance, he would do whatever he’s told.
Just like last time.
Does anyone take all this seriously?
However, the pumpkin carriage is not going to be…
And Cinderella isn’t so naive anymore.
She doesn’t expect the fairy godmother to wash her off or the prince to save her…
THANASSIS K.
