sive VAT raises (which were followed by the
increase of the low VAT rate in early 2011), the
increase in excise taxes on alcohol, tobacco and
fuel, and the reduction of public servant salaries
and pensions by 20%. All this led to a drastic
reduction of the consumers’ purchasing power,
the increase of hoarding tendencies even by the
so-called “haves” in anticipation of a rather uncer-
tain future, the drop in liquidity, the dramatic
increase in unemployment.
All this, combined with the reproduction of a neg-
ative sentiment in the market, “had”, as pointed
out by ESEE, “dramatic effects on Greek retail
enterprises. At the same time, the possibility of
new measures, which looms like the sword of
Damocles above the market, dampens any
investment initiatives”.
During this year, more than 45,000 businesses
were erased from the Chambers’ registers, and,
therefore, from the country’s business map.
There were more than 7,000 shutdowns only in
December, while the average number of closures
during the second half stood at approximately
4,000. If, at the end of the day, the explosion of
shutdowns during December turns out to be no
coincidence but the beginning of a harsher whit-
tling down of entrepreneurship, then it is highly
probable that the conclusions of the survey, which
was carried out by the Hellenic Confederation of
Professionals, Craftsmen and Merchants
(GSEVEE) and referred to the possibility of more
than 170,000 closures and 300,000 job losses in
2010-2011, will come true.
Tax increases triggered the upsurge of inflation,
which in December 2010 stood at 5.2% year-on-
year, as compared to 2.6% in December 2009.
Moreover, according to estimates made by the
responsible ministries, at least 4 percentage
points of the inflation rate, i.e. 77% of the total,
are due to the increase in taxation. In other
words, if taxes remained at 2009 levels, the infla-
tion rate would amount to approximately 1%.
The extent of tax-push inflation is evident when
comparing the Consumer Price Index for the
goods and services that suffered the greatest tax
increases. Thus:
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