Why did they even let Greece into the EU?
16th April 2010
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There is a real danger that Germany may refuse to hand over it's cash in order to help Greece out of it's mess and who can blame them? It could mean the end of the euro and on the upside a return to cheap holidays and spending £6 for a night out of excellent food and drink! But without being flippant, why exactly was Greece and other countries such as Spain & Portugal who clearly have underlying issues with corruption, ever let into the 'club'?

Here are some frightening facts that beg this very question :

There are 10.7m people in Greece and in 2008 there were 8.3m personal tax returns, BUT 94% of those showed income of less than €30k.

Of those, 5m, or circa 65% declared income of less than the tax threshold of €12k. Only 3k declared income above €200k and only 65 individuals declared income greater than €900k!

Of the 421000 self-employed tax returns, 73% declared income below the €12k threshold, including numerous doctors and lawyers!

In total ‘Direct’ taxes (income & corporation tax) were just 7.7% of GDP in 2008, V’s the EU average of 13.1%!

The government must have been rubbing it's hands when entry was granted and bailing them out now will simply set a precedent for all the mismanaged currencies they have since let in. What will be the outcome and should we be pulling investments out of european funds etc etc? I suspect many investment managers will be doing just that!

Thornton Holmes

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