Germany and Greece

Jeff Randall Live is back after a 3 week absence. It went missing in action during one of the most torrid Augusts in recent memory. A pity since the intelligent comments Jeff and his team bring to business issues and the people they interview on financial matters give one a good understanding of what is going on in the economic world. Yesterday evening for example Jeff interviewed former deputy finance minister Dr Flassbeck who said that by undershooting its inflation target over the last few years Germany had enhanced its own prosperity to the detriment of its fellow eurozone members and should now help make amends. Flassbeck's view is probably not shared by many of his parliamentary colleagues one imagines but it is nice to know that there is at least one German who takes a view similar to other observers which is that German exports and thus its economy have benefited enormously from the lower exchange rate that being in a monetary union in which countries like Greece are also members has achieved. Jeff had not been totally idle during his 3 week absence from the screen however since he had undertaken several interviews in Greece during that time in one of which he was told that Greeks refused to pay tax since the government could not be trusted to use the tax collected for the benefit of the country. It is difficult not to have sympathy for such reasoning. How many times has one been tempted to refuse to pay tax where it is being spent on things with which one simply disagrees. Perhaps for Greece to get over this problem it should allow each taxpayer to nominate how what he or she pays is spent on. Clearly there would have to be complete transparency concerning the outcome with the government setting the tax rate and indicating how much it wants to collect for each category of expenditure with money over collected for a category then used to make up the shortfall in another category.