Economy Still 16% Smaller than Before Austerity
Population Down by Nearly 10% from TrendThe good folks at the "Pink Paper" aka The Financial Times, have been
lauding the astonishing success of Greece.
Economist and Modern Monetary Theory supporter William Mitchell is having none of it.
He is right.
Much like Latvia, where the population has fallen by ⅕ and the economy functions only because of remittances from expats, Greece is imploding:
Today, I consider the Greek situation, the decision by the UK Chancellor to further deregulate the financial services sector and then to calm everyone down or not, some music. The Financial Times published an article (December 12, 2024) – The astonishing success of Eurozone bailouts – which basically redefines the meaning of English words like ‘success’. Apparently, Greece is now a successful economy and that success is due to the Troika bailouts in 2015 and the imposition of harsh austerity. The data, unfortunately, doesn’t support that assessment. Yes, there is economic growth, albeit from a very low base. But other indicators reveal a parlous state of affairs. At least, this blog post finishes on a high note. Please note there will be no post tomorrow (Wednesday) as I am travelling all day. I will resume on Thursday.
………
DP growth is certainly occurring from a very low base.
But the economy remains 15.9 per cent smaller than it was in the June-quarter 2007, before the GFC.
The FT journalist then wrote:Between the eve of the Covid crisis in 2019 and 2024, IMF data shows GDP per head will have grown more than 11 per cent in Greece …It is not hard to increase GDP per capita when the nation’s population has contracted sharply since the austerity began.
Here is the evolution of the total population.
Since 2010, the Greek population has declined by around 5.2 per cent and a significant proportion of that decline has been driven by younger, educated Greeks leaving for distant shores.
A talent loss that will haunt the nations for decades to come.………
The current GDP figures would look pretty wan if a significant proportion of the population had not been driven out of the nation by the austerity.
In fact, GDP per capita would remain below the peak in 2010 despite the recent GDP growth.
Further, unemployment remains high.
Here is the latest unemployment rate graph (to October 2024) with the dashed line being the moving average given the data is not seasonally adjusted.n October 2024, there were 9.2 per cent of available workers unemployed.
This is what happens when you let Germans run economic policy.
Well, that, and you end up with the unpleasant short man with a mustache.
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