The Greek economy

Greece’S high defence spending has contributed to its economic problems. Indeed, the country has Europe’s highest military expenditures relative to GDP and last year this stood at 3.2% higher that that of Britain. Improvement in relations with Turkey could enable Prime Minister George Papandreou to cut defence spending and make it easier to rescue an economy on the brink of bankruptcy. But the true complications with the economy arise from a chaotic system of taxation. The mainstream television channels were full of stories yesterday about tax evasion and an incompetent system that has not yet introduced a PAYE method to collect taxes. Reforms are needed now before its too late. Those of us who travel to Greece frequently would know that the country is not poor so the question must be what has gone wrong? The answer is financial reforms and the better distribution of wealth.