As
Greece moves closer to becoming a cashless society, it is clear that
the country’s attitude towards cash is reckless and dangerous. The
supposed convenience of switching to a cash-free system comes with a
great deal of risk, including needless overreach by the state.
by
Michael Nevradakis
Part
2 - The IMF’s Greek experiment in austerity
These
suggestions, which of course the IMF does not necessarily officially
agree with, have already begun to be implemented to a significant
extent in the IMF debt colony known officially as Greece, where the
IMF has been implementing “socially fair and just” austerity
policies since 2010, which have resulted, during this period, in a
GDP decline of over 25 percent, unemployment levels exceeding 28
percent, repeated cuts to what are now poverty-level salaries and
pensions, and a “brain drain” of over 500,000 people—largely
young and university-educated—migrating out of Greece.
Indeed, it
could be said that Greece is being used as a guinea pig not just for
a grand neoliberal experiment in both austerity, but de-cashing as
well. The examples are many, and they have found fertile ground in a
country whose populace remains shell-shocked by eight years of
economic depression. A new law that came into effect on January 1
incentivizes going cashless by setting a minimum threshold of
spending at least 10 percent of one’s income via credit, debit, or
prepaid card in order to attain a somewhat higher tax-free threshold.
Beginning
July 27, dozens of categories of businesses in Greece will be
required to install aptly-acronymized “POS” (point-of-sale) card
readers and to accept payments by card. Businesses are also required
to post a notice, typically by the entrance or point of sale, stating
whether card payments are accepted or not. Another new piece of
legislation, in effect as of June 1, requires salaries to be paid via
direct electronic transfers to bank accounts. Furthermore, cash
transactions of over 500 euros have been outlawed.
In Greece,
where in the eyes of the state citizens are guilty even if proven
innocent, capital controls have been implemented preventing ATM cash
withdrawals of over 840 euros every two weeks. These capital
controls, in varying forms, have been in place for two years with no
end in sight, choking small businesses that are already suffering.
Citizens
have, at various times, been asked to collect every last receipt of
their expenditures, in order to prove their income and
expenses—otherwise, tax evasion is assumed, just as ownership of a
car (even if purchased a decade or two ago) or an apartment (even if
inherited) is considered proof of wealth and a “hidden income”
that is not being declared. The “heroic” former Finance Minister
Yanis Varoufakis had previously proposed a cap of cash transactions
at 50 or 70 euros on Greek islands that are popular tourist
destinations, while also putting forth an asinine plan to hire
tourists to work as “tax snitches,” reporting businesses that
“evade taxes” by not providing receipts even for the smallest
transactions.
All of these
measures, of course, are for the Greeks’ own good and are in the
best interest of the country and its economy, combating supposedly
rampant “tax evasion” (while letting the biggest tax evaders off
the hook), fighting the “black market” (over selling cheese pies
without issuing a receipt, apparently), and of course, nipping
“terrorism” in the bud.
As with the
previous discussion I observed about Amazon being a satisfactory
replacement for the endangered brick-and-mortar business, one learns
a lot from observing everyday conversations amongst ordinary
citizens. A recent conversation I personally overheard while paying a
bill at a public utility revealed just how successful the initial and
largely uncontested steps enacted in Greece have been.
In the line
ahead of me, an elderly man announced that he was paying his water
bill by debit card, “in order to build towards the tax-free
threshold.” When it was suggested to him that the true purpose of
encouraging cashless payments was to track every transaction, even
for a stick of gum, and to transfer all money into the banking
system, he and one other elderly gentleman threw a fit, claiming
“there is no other way to combat tax evasion.”
The irony
that they were paying by card to avoid taxation themselves was lost
on them—as is the fact that the otherwise fiscally responsible
Germany, whose government never misses an opportunity to lecture the
“spendthrift” and “irresponsible” Greeks, has the largest
black market in Europe (exceeding 100 billion euros annually), ranks
first in Europe in financial fraud, is the eighth-largest tax haven
worldwide, and one of the top tax-evading countries in Europe.
Also lost on
these otherwise elderly gentlemen was a fact not included in the
official propaganda campaign: Germans happen to love their cash, as
evidenced by the fierce opposition that met a government plan to
outlaw cash payments of 5,000 euros or more. In addition, about 80
percent of transactions in Germany are still conducted in cash. The
German tabloid Bild went as far as to publish an op-ed titled “Hands
off our cash” in response to the proposed measure.
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