Angry Greek consumers take over road toll booths in protest over price

[mightyace]

Greek anti-toll protests:

http://www.upi.com/Top_News/World-News/2011/02/07/Protest-means-no-tolls-for-Greek-drivers/UPI-70311297059143/

Greek motorists had a holiday from paying tolls Sunday, thanks to protesters who feel abused by private contractors who run the toll roads.

Members of the "I won't pay" movement raised the gates at toll posts for several hours across Greece, letting motorists roll on by for free, the Athens News Agency reported.

The organizers say they oppose toll hikes when the contractors have not built alternative access roads for local communities.

"We pay taxes on fuel and road taxes so that roads can be built," protest organizer Stratis Loupatatzis told the news agency. "We will not pre-pay road tolls as well."

He said the protesters are ready to go to court to get the toll road concessions contracts canceled.

http://www.breitbart.com/image.php?id=app-2c2332de-8eb0-4eb3-b74c-869bb9eeeb1f&show_article=1&catnum=-1

http://www.demotix.com/news/553193/angry-greek-consumers-take-over-road-toll-booths-protest-over-price

Thousands of Greek protesters took over road toll stations across the country today in protest over government plans to raise toll prices next month. From the capital, Athens to Thessaloniki, 500km to the north tolls were raised and drivers were allowed to pass through without paying.

Truck drivers, pensioners, students as well as more seasoned political activists passed out leaflets and encouraged road users to refuse pay tolls in a new form of grassroots activism which is being fed by popular anger at the government's repeated attempts to raise revenues through indirect taxation and cut public spending.

Already between 20 and 30% of highway users are not paying toll charges on a regular basis, a figure which is set to rise in the wake of proposed 50% increases.

[berberry]

I have mixed feelings about toll roads, but when one is built where there is no reasonable alternative route then whatever entity is collecting the tolls becomes the equivalent of a mafia family.  If that's indeed the case here then I fully support these protesters.

[Chris]

Greece is very mountainous. Any alternative route to the toll roads are much slower by default. For example when they completed the A2 (Igoumenitsa - Kipi, 670 kilometers) they slashed travel times from 12 to 6 hours.

[berberry]

Greece is very mountainous. Any alternative route to the toll roads are much slower by default. For example when they completed the A2 (Igoumenitsa - Kipi, 670 kilometers) they slashed travel times from 12 to 6 hours.

I realize Greece has mountains, but thanks for pointing out how relevant it is to what is apparently going on here because it does matter.  I stand by what I said, though.  If the A2 doesn't help to improve commerce in the country, then why did they build it?  The government should build the roads, period!  They should do it with taxes and they shouldn't charge a toll unless a reasonable and free alternative route exists.  I can't think of a single instance where I'd make an exception.

This is called infrastructure.  If built for the right reasons, the road should pay for itself by improving commerce. 

[J N Winkler]

I am sure there are many Greeks who now wish an alternative financing method had been chosen.  However, most of this infrastructure--including not just the toll motorways but also Eleftherios Venizelos Airport in Athens--was built after it was known that Greece would join the euro.  Euro membership allowed the Greeks to borrow at interest rates which were far too low given the structural weaknesses in their economy, so PPP crowded out other methods of infrastructure provision which would have required deeper structural reforms.

These protests are happening (and have been happening since the late spring) because the party is over, the Greek government has hit a wall in terms of its ability to finance outgoings by issuing new debt, and the Greeks at large are having pay-as-you-go crammed down their throats in one go instead of being able to spread it out in time.

[berberry]

I am sure there are many Greeks ...

This is all true, and it sounds as though you're trying to edify more than argue.  But I must say that my sympathies still lean toward the protesters.  I still believe that where there is no alternate route, there's no excuse whatsoever for a roadway toll.  One exception, which I think is worth mentioning but which doesn't apply here:  where a roadway is not necessary for commerce but is intended for sightseeing, as in a park, I have no problem with a toll.  Sometimes that's the best way to pay for park maintenance.

As you seem to be aware, the Greek govt has problems that go far beyond turnpike protests.  But those problems shouldn't be solved on the backs of the poor folks whose livelihoods depend on the highways.  I can't see any happy ending for the present set of crises in Greece.  However, the builders of those tollways are corporations, aren't they?  Corporations take risks in order to turn profits.  Sounds to me like we have some cases here that will prove to be good examples of the "risk" part of market-based economics.

[Chris]

The problem is the Greek population is heavily centered in Thessaloniki (pop. 1 million) and Athens (pop. 4 million) with not many other larger cities. Most toll roads they've built are very expensive, often exceeding $ 30 - 50 million per mile, with very low traffic volumes. You can't just spend $ 4 billion in tax money for a few thousand vehicles per day on average. So I think the choice for toll roads is legit. Toll hikes to cover government deficit isn't though.

[mgk920]

Another thing is that for the countries that use it, the Euro is very analogous to a gold standard - if you don't have them, you can't 'print' any more.  It is very similar to the relation between the USA Dollar and the various USA states, as well as for the other countries that use it.  Had Greece not adopted the Euro, they likely would have added five or six 'zeros' to their Drachma over the past couple of years, instead.

The Greek Government simply spent too much money and the credit card bill is coming due.

Mike

[berberry]

The problem is the Greek population is heavily centered in Thessaloniki (pop. 1 million) and Athens (pop. 4 million) with not many other larger cities. Most toll roads they've built are very expensive, often exceeding $ 30 - 50 million per mile, with very low traffic volumes. You can't just spend $ 4 billion in tax money for a few thousand vehicles per day on average. So I think the choice for toll roads is legit. Toll hikes to cover government deficit isn't though.

Mountain roads are always expensive, but I didn't realize that so few vehicles use the roads.  That would seem to make a difference, but in that case it doesn't make sense that so many protesters would go so far in protesting the tolls.  Perhaps to them the toll roads are a metaphor for the larger issues facing Greece right now.  

You have brought up something I hadn't thought of since this discussion began, though; thanks.  I guess I could live with temporary tolls used strictly to pay off the construction bonds when a roadway or structure, such as a bridge or tunnel, is of such an unusually large scale that other means of financing aren't available.  I would only approve it, though, in cases where the structure would make a dramatic improvement to commerce and safety.

Knowing more about what else is going on in Greece, I would still cut some slack to the protesters.  If what you say is true - that these roads are not much used - then this is clearly about more than tolls.  

And given the news today from Egypt, I believe protest movements in a lot of countries might catch fire very soon.  Certainly the Greeks will be influenced by what's just happened (Mubarek has resigned).  Maybe they'll notice that the protesters in Egypt got what they wanted without shutting down the Suez Canal.

[english si]

Had Greece not adopted the Euro, they likely would have added five or six 'zeros' to their Drachma over the past couple of years, instead.

It would have gone the way of the UK, not hyper-inflation. The crisis was only a big thing because they refused to stop spending, and had their hands tied with the currency - the UK is Greece without the hands being tied, Ireland is Greece with austerity rather than spending (other than bailing out the banks) when things started going wrong. Iceland is what you get with neither.

Ireland would have just made it, had the ECB and IMF not ruined their credit score by saying that they really were in big trouble if they didn't ask for a large loan to deal with their problems of borrowing too much.

But heh, the political idealism of the Euro and the end of the European nation state is bailed out and Greece and Ireland can serve as a call to have EU-wide taxation without proper representation (electing some members to the rubber-stamp chamber doesn't count as representation).

[Chris]

One also has to consider tax evasion is the number one occupation of the Greek population. The government problems would be less if they didn't lose billions because of tax evasion annually.

[berberry]

One also has to consider tax evasion is the number one occupation of the Greek population. The government problems would be less if they didn't lose billions because of tax evasion annually.

That's a good point, but I think it could be overstated.  The type of people most likely to actively protest something usually aren't the ones with the most incentive or opportunity to evade taxes to any meaningful degree.

[J N Winkler]

One also has to consider tax evasion is the number one occupation of the Greek population. The government problems would be less if they didn't lose billions because of tax evasion annually.

Yup.  This is what I meant by deep structural reform.  The ideal would be for Greece to reform the tax code by removing (so far as is possible) the opportunities for evasion, sweetening the deal (if necessary) by accepting a temporary reduction in the tax take as a percentage of GDP.  A consistently enforced tax code allows businesses and individuals to plan their budgets reliably, and gives the government enough revenue to provide the infrastructure and public goods required for businesses to thrive and individuals to maintain a good standard of living.  But these reform proposals rarely gain traction.  Greece has a long history of weak and unstable government (regime of the colonels from 1967-74, excessive meddling by the Greek royal family before then, Venizelist struggles and fascism in the interwar period, "Greater Greece" irredentism leading to military adventures and generally unsuccessful attempts to seize Turkish territory, and the era of the "country parties").  Partly as a result of this history, Greeks are also culturally very distrustful of government and unwilling to believe that it is possible to benefit from interaction with government except by string-pulling, dodging regulations, and evading tax.

It has been suggested that the austerity measures the EU wants would actually make economic recovery impossible for Greece and so leave the country worse off than if, for example, it defaulted on its sovereign debt, left the euro, and started from the bottom up in rebuilding its economy.  The problem is that the short-run penalties for Greece of refusing the austerity measures are so severe that they make it highly risky for Greek politicians to try to imitate Lázaro Cárdenas.