The US bug, whereby the worse the economy, the higher the stock market and bond prices must have shifted to Greece, because while the Greek stock market was the best performing “asset” class in October, and Greek bond yields are plunging just because the greater fool stock posse has now moved to the insolvent nation if only for a few months, the economic reality just gets worse by the minute. Case in point – Greek corporations, or what’s left of them, and what Greece needs more than anything – taxes. Kathimerini reports, in what is now nail overkill on the Greek economic coffin, that “hundreds of thousands of enterprises are unable to fulfill their tax obligations, according to the data published on Monday by the Finance Ministry. Within just one month, from the end of August to end-September, the number of corporations that have fallen behind on their taxes soared from 182,785 to 526,477.” No, you read that right: the number of companies that went in arrears on their tax obligations has tripled to over one half million in one month. The same month in which the Grecovery was rumored to be in full swing and when John Paulson was buying every Greek stock he could find.
It’s a crazy pills world as Kathimerini reports.
According to a senior ministry official, most of those 343,692 additional enterprises that failed to meet their obligations have entered special payment programs in the hope of settling their debts in 12 installments. The total amount that corporations owe to the state comes to 39.3 billion euros, but only 647.69 million euros of that has been arranged for payment.
There was a silver lining: with virtually nobody working officially, as unknown amounts have shifted to the gray economy, the taxpayer debt have plunged. Why? Simply because if one doesn’t officially make money, a luxury corporations can’t afford, one doesn’t officially have to pay any taxes, hence no taxpayer debts.
Surprisingly, the opposite trend is apparent in taxpayer debts, as debtors numbered 2.8 million at the end of August, a figure which fell to 2.59 million at end-September. In total, they owe 22.6 billion euros.
A ministry source pointed to the improvement in debt collection, as total receipts in the year to end-September amounted to 2.13 billion euros, up by 35 percent year-on-year.
September revenues grew by 37.2 percent from September 2012, which the general secretary for public revenues, Haris Theoharis, attributes to “the high level of collection of past years’ debts.”
Good luck collecting in current year debts when the unemployment hits fresh record highs, and thus the base of taxpaying individuals craters.
As for corporations, our best advice is for Greece to tax the bankruptcy process. That’s the only way the dying country can possibly collect any “owed” funds from what is left of the country’s once thriving businesses.
But at least the Greek economic skeleton still has its precious euro.
Meanwhile, elsewhere in the same basket case country…
Three police officers were injured on Monday as a group of protesters smashed into a courthouse in the city of Iraklio on Crete where the trial of 92 farmers arrested in 2009 was under way.
The three officers suffered scrapes and cuts from falling glass when a group of farmers smashed through the courthouse’s main door at around 3 p.m. demanding that their colleagues be acquitted of all charges.
The 92 farmers standing trial are accused of obstructing public transportation, among other charges, after staging a blockade of Iraklio Airport in January 2009.