What is worse than having inept leaders?
To answer that question, one has to take a look at the number of anti-social measures stacked together onto a gigantic law up for vote this coming week at the Greek parliament.
Hit by a ballooning debt that was inflated by financial games played upon the back of state-issued bonds, the Greek government – elected under the socialist flag and led by American born George Papandreou, son and grandson of prime ministers – has shocked the Greek social strata by introducing a number of changes Greece hasn’t seen since the era of Dracon, 28 centuries ago.
The introduction of multiple layers of taxation, pension cuts and elimination of benefits for the elderly and women with children is about to alter Greek society for good. Wages in Greece, already at the bottom of the European Union with a monthly 700 euro average, are about to shrink even lower, due to immediate and secondary taxation layers.
Those that accused Greece of “partying” with loaned money need to have their facts checked; Greece is at the bottom of fund-absorbing countries in the EU, due to the sheer amount of red tape and the ever-changing direction of every elected government; the primarily bi-partisan system often leads to changes of power, much like Democrats and Republicans in the US. Debt ballooned primarily through the raising of interest rates and the bidding of international hedge fund managers such as Goldman Sachs against the Greek debt. At the same time, tax-evasion became the national sport thanks to the ineptitude of the government to police its own tax-gathering system.
Surely there is a number of healthy elements in this ongoing chaos, where those working in the public sector – a large, bureaucratic beast – grew, fed and multiplied sapping the energy of the much healthier private sector and the entrepreneurs.
Since its introduction in the early 1990’s, the Greek Internet has remained a relatively untapped territory with regards to government intervention; with the ever-increased globalization of services and the proliferation of web portals serving news and information via blogs, the government is now seizing the opportunity to add yet another level of taxation – simply because they can do so.
Enter, the aggeliosimo.
Starting July 1st, a special taxation of 21.5% referred to as “aggeliosimo” (literally: announcement tax) will apply to all advertising that Greek-based web and Internet portals engage into. In other words, operators of web forums, portals, news or information web sites in the .GR realm will have to collect an additional 21.5% from their advertisers and submit it to a special fund set aside for the Social Security Fund of journalists.
It is not clear which government pencil-pusher is the brilliant inventor of this incredible manifestation of entrepreneurial strangulation. Effectively, the 21.5% taxation will immediately strip thousands of .GR sites that carry advertisements of their source of income, as it will surely lead advertisers to portals outside of Greece.
No entrepreneur or corporation in their right mind would want to spend 21.5% more for the same amount of advertising, just because the Greek government wishes to expand its reach into untapped territory, particularly when the funds collected would benefit a well-established Social Security fund.
At the same time, the same legislation forces web portals that present a constant feed of news and information to insure their personnel under new, more expensive pension groups that would increase the piece of the pie ending into the hands of the Greek IRS.
It is uncertain how this will affect PPC companies that appear on parked .GR web sites along with major other advertising channels, such as Google Adwords. It would be interesting to see how the Greek government would enforce the collection of a 21.5% fee from Google, for ads that are displayed on .GR web sites. The process is clearly impossible and it will lead to the collapse of advertising on .GR web sites.
Overall, the decision to stifle the entrepreneurial spirit and technological investment in Greece is a clear shot in the foot of a government and the nation it’s supposed to represent.
As the Greek Prime Minister, Mr. George Papandreou is clearly incapable of retaining a clear, honest and effective control of the situation and is leading the country into social unrest, financial turmoil and towards the technological Dark Ages.
That’s sad man, I would have thought the Greek Government realises that in order to save money they need to promote the internet and leave behind the offline World, that is what most other advanced economies are doing.
Sad thing is that in spite of seeing what this will do to Greece that eventually other governments will most likely start implementing the same or similar things.
Jon – that measure has nothing to do with offline vs online, it’s taxation of those entrepreneurs who the Internet, in order to match the taxation of conventional media, e.g. the press and television channels.
Troy – True, never underestimate the creativity of bureaucrats.
It’s not clear yet how it will affect advertising. As you said, enforcing such a stupid law may prove impossible. As usual, it will some down to fines. No one will pay the tax, Greek-IRA will fine at will everyone with Google Ads on their website. But, again. Google Ads may automate the whole process, so that you pay the tax via them. How brilliant is that…
Only 1 solution: Move to Cyprus. Let Greece roll over and die. http://cipa.org.cy/easyconsole.cfm/id/162
Pano – Perhaps it’d be better to motivate others to protest and let politicians realize they screwed up. The matter is not simple, because the aggeliosimo measures affect owners of .GR domains that fall within the Greek jurisdiction; simply moving a company’s locale to e.g. Cyprus – hardly an offshore paradise anymore – is not the smartest thing to do.
Furthermore, wishing for Greece to “roll over and die” when it’s clearly the politicians that need to shape up, hits me as unpatriotic. A country’s progress depends on its ability to support growth, absorb and utilize investment capital, implement social wellness and financial responsibility; entrepreneurship is the answer to stagnant assumption of civil servant positions.
Adsense will dominate all .gr websites, greek advertising platform startups will get shut down, Greek Goverment will make pennies and will loose more in the next year(s).
Άιντε θύμα άιντε ψώνιο άιντε σύμβολο αιώνιο αν ξυπνήσεις μονομιάς θα ‘ρθει ανάποδα ο ντουνιάς.