Thursday, September 17, 2015

On Notice: Greece’s Vested Interests

by Hugo Dixon

New York Times

September 16, 2015

One of the few near-certainties about Sunday’s general election in Greece is that it will produce a government committed, at least nominally, to the bailout agreement struck last month with the country’s creditors. Not only is former Prime Minister Alexis Tsipras a reluctant convert to the deal, which could make available 86 billion euros in new loans, the main opposition party, New Democracy, is prepared to back it, too.

A casual observer may think the bailout condemns Greece to more years of austerity. This is part of the story, but not its main aspect. Greece’s two previous bailouts sought to cut spending and raise taxes; insofar as they tackled special interests, they concentrated on limiting the power of organized labor. The thrust of the latest plan, in contrast, is to combat cheating and sweep away the privileges enjoyed by a wide swath of groups, including farmers, shipping magnates and pharmacists. Some of these are natural supporters of the former conservative-led coalition, which explains why it did not do more to curb their privileges (and why Mr. Tsipras, a leftist, sees some political mileage in doing so).

Affected groups may squawk, but the country will benefit. Prices will fall and consumer choice will increase as businesses respond to competition. And if the fight against tax evasion succeeds, honest citizens will no longer have to carry the burden of those who cheat.


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