A view of Greece from the Outside - Commentaries and Opinions
I really don't like this graph:At minimum, exclude Ireland (with its activity as booking center for MNCs, Irish GDP saw meaningless jumps of qoq GDP above 20% in recent past)And it is more interesting to see it in monetary value (rather than indexed): - It helps realise that Portugal and Greece are not far away - and that Poland is coming very fast or may have over-passed them by now.
Please define "hours worked".Do you mean that Greece has many unemployed and pensioners who do not work?Dean.
Greece worked more hours for less GDP. However. Both figure which make the equation are a big question. Lots of GDP value lost to black market. Meanwhile lots of labour lost to black market. V
V:I am a bit sceptical about OECD figures. What is the source?D.
Yes. Lawful hours worked. How does one calculate the unlawful or black market labour?V
low productivity due to low investment and de-industrielization. also due to large % of the work force employed in parasitic non-producing services, e.g. public sector
Oh yes those parasitic doctors, nurses, policemen, soldiers, firefighters, teachers, professors, waste collectors,...If it weren't for them we would certainly be living in paradise...
@Anonymous May 3, 2018 at 1:00 PMTwo things. First, not all public-sector employees work in useful services like the ones that you mention; a lot are just bureaucrats, stamp pressers and meaningless office jobs that not only are a drag on growth (waste of taxpayer money and resources that could be used more effectively) but also complicate our lives (tons of meaningless certificates required for simple tasks). Second, the Greek public-sector is so badly organized that even the useful services that you mention have very low productivity, resulting in "leakages" through assorted private-sector activities to make up for their deficiencies (for example private tutoring, private tax-accountants to deal with the messy laws, private nurses etc etc, to name but a few). All in all, Greece remains the epitome of badly allocated resources and wasted potential.
That graph is not actually about Greece, it's about Ireland. Any every Irish economist knows that GDP doesn't measure the actual output of the Irish economy. GNP is better, but still flawed. This wasn't actually deliberate on Ireland's part - it's just the way international standards handle an activity (encouraging Foreign Direct Investment) that Ireland is extraordinarily good at.Mind you, it did come in handy when the country attempted to exit the bailout program early.Here's an overview of how to try and interpret irish national accounts and strip out the effects of tax domiciled companies and so on.http://www.finfacts.ie/irishfinancenews/article_1028865.shtml
I took the graph from Twitter where it was published without comment. Apparently, this goes back to a study by a professor at the Royal Holloway University (source of graph is indicated as OECD).Below are a couple of further links on the subject. Particularly the graph about the portion of self-employed in the Greek economy I found interesting. To have such a high proportion of one-person businesses may unfold creativity and improvisation but it hurts efficiency and productivity.https://twitter.com/paul1kirby/status/991438918754160640https://twitter.com/mnicoletos/status/991351632729444354
Obviously self-employed people shelter income through tax deductions and expenses. Almost everything a self-employed person does during the day qualifies as an income tax deduction. From mileage, to food, to utilities; you name it. All you have to do is keep good records.As we know Greece is full of small SMEs and working for those is akin to slavery. At least as a self-employed person you have the freedom of thought & action and a very legitimate way to shelter income through expense deductions.Trying to change the makeup of the Greek employment picture is the very long way of trying to solve Greece's problems. Better accept the reality on the ground which is that a large segment in the services industry such as lawyers, doctors, accountants, engineers, realtors are self-employed. There is no way to change this in a generation.Dean.
A quote from a commentary in the Ekathimerini:"Seven out of 10 self-employed professionals and nine in 10 farmers continue to declare incomes of less than 9,000 euros a year."
I think the Greek economy is 82% services and 18% industry. The 18% industry segment you can tax pretty much accurately. The 82% just forget it. You may want to but you can't.
Kleingut, statistics give us the surface only, necessarily. At one point in time due to high rates of unemployment, I guess, our politicians came up with the idea of what they called, curiously enough, Ich Ag = Me incorporated.Recently I realized one lucky used book seller, that may well have started under the program. The vast majority of cases, I observed may simply taken the chances of getting more money if they joined the program while unemployed. Every single one returned to the not self-employed economy.German link to the used-book start up by now bought up:https://de.wikipedia.org/wiki/Momox****that said, as student I worked for an accounting firm for a while. I was admittedly pretty startled how well it works for the surely beyond average fewer that can afford the experts. One professional couple on the upper layers even managed to get their kids full state support as students. They simply heavily invested in real estate. I think at that point in time Bafoeg wasn't really a credit yet. Meaning something that had to be repaid.https://en.wikipedia.org/wiki/Student_financial_aid_(Germany)LeaNder
Meat and potatoes for Greece: infrastructure, infrastructure and infrastructure. These are the easy projects for EU funds absorption:http://www.ypodomes.com/index.php/special-editions/news-in-english/item/46645-go-ahead-with-150mn-euros-by-the-ministry-of-infrastructure-for-amvrakia-motorway-s-contractI wish they could give the same amount to smart young people to start the internet based economy. Skip the industrial stuff and walk straight into the communications age.Dean.
And speaking of infrastructure, there is enough here to feast your eyes:http://www.ypodomes.com/index.php/special-editions/news-in-english/item/46604-greece-s-projects-monthly-agenda-which-are-in-the-starting-and-the-finishing-line
There seem to be a fatalistic agreement that Greece can only rake in taxes from a very small part of the economy, which is not a problem if people realize the consequences. These taxes will only allow a very low quality of social services such as health care, pensions, unemployment benefits, education etc.Lennard.
I don't think this is accurate. Greece can rake in a lot of taxes provided the austerity veil is lifted. To put it simply, the nature of the Greek economy is ill-designed for austerity of any kind. Which brings us to the topic no one wishes to discuss, which is: Who told the EU that by "fixing the government spending" a la austerity galore in Greece they would also create a healthy economy? What sort of nonsense is this for a country with the characteristics of Greece? What other European country is the model for Greece? meaning has a like-type economy? Cyprus? Because Cyprus is growing like crazy but does not have a deep economy either. So, who gave Europeans the encouragement that somehow they knew better what Greece needed and then proceeded to impose austerity? And the short answer is: the EU cares none about either the health of the Greek economy or Greek prosperity. All the EU (aka Germany) cares about is the common currency because without a weak euro Germany dies in less than a New York minute.Dean.
Meaning, Dean?I may surely host quite a bit of whatever was the sum of my perception of you as gatekeeper somewhere else. But here goesprovided the austerity veil is liftedOnce you can bring in your investors again, invest yourself a bit on the way?LeaNder
LeaNder:I don'r understand what you mean. Care to elaborate?
Maybe things are happening which don't register on the radar screen:http://www.reuters.tv/v/tKo/2018/05/04/startup-culture-emerges-from-greek-economy-woesDean.
Thanks kleingut for the interesting chart: Indeed it points to the core of the problem: the very low productivity of the Greek economy. As long as the Greeks deny that this is the main cause of their economic ills there will be no change. Any recovery will be short lived and Greece will remain one of the poorhouses of Europe.Urs
The graph comes from the OECD report on Greece. The OECD's official position on Greece is very different:"The gushing praise in the quote came from Angel Gurria, head of the OECD, last week – the leader of a pro-capitalist group, cheering the work of the leader of Greece’s radical leftists. “I would like to congratulate you, your administration and the whole of Greece for an impressive stabilisation effort and one of the most ambitious reform packages we have seen at the OECD in recent times,” said Gurria. “This is starting to bear fruit.”"https://www.telegraph.co.uk/business/2018/05/05/greece-escapes-financial-tragedy/?WT.mc_id=tmg_share_fbBasically, comments like yours reinforce my already substantial bias that those criticizing Greece have no clue what they are talking about. To want Greek productivity to rise you must find employment for Greeks within sizeable private firms and not SMEs. And in order to do this you need to lift austerity. Austerity is something that serves the state as a collector of taxes and spender of revenue. It does absolutely nothing for the economy of Greece.I don't mind the commentary about Greece's ills but first you need to come to an understanding about the subject matter. Otherwise, commentary like this is filed under " discardables".Dean.
So basically Mr. Gurria agrees that the Troika, Mr. Schäuble and the other EZ ministers were right and Varoufakis and the Syriza Gvt. in 2015 was wrong because the reform packages and stabilisation efforts were dictated to the the Greek Gvt. and denounced as toxic austerity by them. I am not surprised at all. Urs
@Anonymous May 6, 2018 at 5:20 PM (aka Dean)Maybe you should decrease the quantity and increase the quality of your comments. Each post features dozens of them, most filed under "discardables".If austerity is to be blamed for the lack of sizable private firms, then why is that before the imposition of austerity the vast majority of Greece's enterprises were still small?No, Greece's problems are much more deep rooted than the recent implementation of fiscal austerity. By this I don't mean that austerity is good. It's short-sighted and eventually will fail under the weight of the enormous taxation being applied. Just that Greece's structural problems don't stem from that.
Jim Slip:The point is that unless you understand the Greek economy, you can't change it.Do you want to tell us what the Greek economy consists of and how to improve it?I seriously doubt you know.
Από τι αποτελείται η ελληνική οικονομία; Δεν κατάλαβα, πρόκειται για κάποια απόκρυφη πληροφορία στην οποία έχει πρόσβαση κάποια πεφωτισμένη ελίτ; Εσείς, να υποθέσω;'Οταν κάποιος πετάει μια κοτσάνα, όπως ότι οι 'Ελληνες άνεργοι θα βρουν δουλειά σε μεγάλες επιχειρήσεις αν σταματήσει η λιτότητα, καλό είναι να μην το παίζει αυθεντία. Ας θυμηθούμε πως τις "χρυσές" εποχές του δημοσιονομικού εκτροχιασμού (δεκαετία 2000), η προσωρινή λύση στο πρόβλημα της ανεργίας βρέθηκε μέσα απ' τα τραγικά προγράμματα stage.'Οταν μια οικονομία έχει τόσο μεγάλα δομικά προβλήματα, σε εποχές μάλιστα παχιών αγελάδων (και προφανώς η πληθώρα μικρών επιχειρήσεων και αυτοαπασχολούμενων αποτελεί χρόνιο πρόβλημα), ε, ας το παραδεχτούμε, η οργάνωση και χρησιμοποίηση πόρων στην Ελλάδα είναι τραγική. Πόσο τραγική; Η Φινλανδία με μισό πληθυσμό παράγει το ίδιο ΑΕΠ, τόσο τραγική.
Jim Slip:Apo Ellinikes sahlamares kai vlakies then thelw na akouw allo. Labour Productivity Growth is calculated from quarterly Real GDP and quarterly Employment. Hellenic Statistical Authority provides Real GDP in EUR (the same effing incompetent ELSTAT), at chain linked 2010 prices and Employment.In the latest reports, Greece's Population reached 11.18 million people in Dec 2016. Its Unemployment Rate dropped to 20.83 % in Dec 2017. The country's Labour Force Participation Rate increased to 59.20 % in Dec 2017.Do you have any idea what a labor participation of 59% means when the EU average is 75% and above?Eff Finald and learn to concentrate on Greece. What is your own contribution to Greek productivity? Let me guess: zero, right?
So, genius, what's your point, other than that the end of austerity will magically create big enterprises (although these somehow never existed before austerity was implemented)?Maybe you should stop pretending that the problems that have been plaguing the Greek economy for decades are not of Greece's own making. When most Greeks do that, Greece will be able to proceed in solving them.What are Greece's problems? Terrible organization of resources (both physical and monetary) due to anomie and vested interests.
Jim Slip:The Greek GDP in case you don't know(which I am sure you don't) is comprised of the following components:Agriculture....1.6 BEUConstruction....1.9 BEUMining..........5.2 BEUPublic Admin....9.05 BEUServices........7.8 BEUSo if I put you in charge of the Greek economy (God forbid), how you and the other hardheaded Greeks would grow it? Where would you start?Oh, and the other little thing that I need to hammer into your head (fearing your limited capacity for comprehension to be an acute problem) is that Greece has two economies: The Winter economy during which Greece is underperforming in GDP terms and the summer economy where Greece is overperforming and thus makes up for its deficits, not in a continuum but by oscillating between an extreme low and an extreme high.So here the questions you need to answer:1. The stupid and unproductive priests you pay as public employees are contributors to productivity? Of course not. So, get rid of them.2. The military people you pay from public funds are contributors to productivity and how do you measure it?3. If you think you can grow your GDP via austerity then you are more incompetent than Urs and I am just being polite about it.So go ahead, show us your technique of how to do it. Impress me and I might withdraw my extremely low opinion of unproductive pensioners as non-contributors to the Greek GDP.And for the record, I never said that by stopping austerity medium size or large size Greek firms will begin to hire for the simple reason that Greek firms never hire anything but their relatives and none of the Greek firms are large to begin with. What I said (which obviously escaped you entirely) is that the only way to increase Greek productivity is to have a massive theoretical conversion of self-employed into employees of large businesses where their productivity will be efficiently regulated. It's only a theoretical "if" which will take generations to implement, if ever, and goes to show you that introducing austerity in Greece for the benefit of its most inefficient component which is its government was a pure poison for the economy and certainly a "solution" which was hatched by idiots, morons and certifiable incompetent pigs (aka European eff ups).So, go ahead. Impress me with the overflowing "quality" of your observations and "knowledge".
Bypassing your moronic insults, your petty reference on the components of Greek GDP (wow!) and your typical leftist sloganeering (get rid of the church, the military, yada yada yada), the first thing Greece needs to do if it wants to progress is to establish the rule of law. Anomie (due to the plethora of vested interests in it's society) is it's single biggest problem. Once that is dealt with, everything else will fall into place, no matter what economic system is going to be implemented (left-wing, right-wing, liberal, centrally planned, it doesn't matter).For the record, you said (verbatim): "To want Greek productivity to rise you must find employment for Greeks within sizeable private firms and not SMEs. And in order to do this you need to lift austerity". You basically said that, once austerity is lifted, unemployed Greeks will find jobs in sizeable private firms.Also for the record, I am no fan of fiscal austerity, certainly not during a time of private loan contraction (deleveraging). The only thing it has achieved is rebalancing through recession, and will ultimately fail under the weight of over-taxation. I have the same feelings about the Eurozone, which imo will also fail in the long-term if a recycling mechanism for the surpluses of the North isn't implemented. That said, I am also no fan of people like you who pretend that everything in Greece is hunky-dory, and that the only problem is that the Eurozone decided to pursue export-led growth through fiscal austerity (i.e. grow at the expense of the rest of the world). I am also a big fan of balanced trade through market protectionism, and am relieved the planet seems to be (slowly) heading towards that direction. Free trade and capital flows have wreaked havoc on the current-accounts of many countries and have distorted their economies in favor of the FIRE sector with dire results.
I was not going to say anything and try to be nice instead. But no. We have to educate some folks again(the same folk it seems to me, over and over and over).Here is what I want you to do. Click on the OECD icon of this graph. It will take you back to an OECD page titled "Productivity - GDP per hour worked". You will see the same graph but now have the option of adjusting parameters (which btw is the professional way).Now, here is the next step, I want you to do. Go at the lower bottom right of the page where it says "Time yearly" and adjust the time bar instead of 2010 all the way back 1970. You will then be able to see how Greece performed in this category since the beginning of reporting numbers which seem to start sometime in 1982. You will aslo see that Greece in the productivity range is back to where it was during the good years of 2003-2004.To show a graph that arbitrarily begins in 2010 and drawing some mickey mouse conclusions about it, is not the professional way to interpret graphs.Unless of course you have a biased agenda which I am afraid many of you commenting here are up to your ears in it and you can't miss (God forbid) an opportunity to display it.So shape up or else. :) and stop pretending that you know what you are talking about because you don't.Again, no one dares to address my main point which is what gives you the impression that you could change Greek productivity unless you have a massive conversion of the unemployed or half-employed into new employment models which by definition have to materialize post-austerity?Dean
1. The professionals provide a link when asking others to click on it. Amateurs don’t. Some people...2. Productivity is measured on the bais of hours worked. Putting more people in low productivity jobs does not raise productivity.3. Do your really claim that Mr. Gurria refers to reform packages that were not inspired by the Troika? Just name 5 or 6 of them.Urs
Urs:The link is in the article itself and it's what Kleingut provided (so click on the link that is already there and go to the bottom right page and click the OECD label again). He claims that he took it off Twitter and the point is that this is an OECD graph, only a manipulated OECD graph designed to promote some nonsense or another (which is the typical play here).From your commentary I have to deduce that you have no idea how an enterpreneur acts or thinks. You think enterpreneurs sit in front of a computer all day, punching in numbers so that their productivity gets measured? No way.As far as those working in the public sector making less than 1,000 euros a month, what sort of productivity are you talking about? These are people with deep grievances; they take their meager salaries as being granted and they look elsewhere to supplement their income. You must be not serious if you expect people who make poverty wages to be agents of productivity. Absolutely not.This is why I am telling you again you do not seem to understand the subject matter. You just want to say something so that you get it out of your system. But what you say is both demeaning and disparaging and has no relation to how one should improve the Greek economy. Which happens to be the topic of this post, unless I missed the cryptic message again.
Well, I am an entrepreneur so if entrepreneurs in Greece think in the same way like entrepreneurs all over the world think I know quite well what they value and what they do not value. An overboarding and inapt bureaucracy for instance like in Greece is something that entrepreneurs hate. For further information regarding the environment that entrepreneurs love or hate you may refer to the Ease of doing business index (where Greece ranks last among EZ countries) https://en.wikipedia.org/wiki/Ease_of_doing_business_indexRaising the wages of public sector employees in order to raise productivity is a very Greek idea. Try it and see if it will work.Don’t waste your time by reflecting on my motivation. I couldn’t care less about yours.Urs
Urs:Greece has a 59% labor participation, the lowest in the EU and you are telling me that austerity is not a major contributing cause? Can you be that stupid?
This morning I received two messages in my in-box from Tradingeconomics:1. Greece Exports was reported at 2885.8 EUR Million in Mar 2018 from 2416.4 in the previous period.2. Greece Balance of Trade was reported at €-1.350B in Mar from €-1.719B in the previous period. It was expected at €-2.1B.I think this say it all.Dean.
Eff Schauble and the stupid Troika. Guria recognizes how remarkable the Greek economy is and its ability to do things that no other country could or even imagine that it could.
The end of "austerity" will not create lots of companies with lots of jobs, it will not even be the end to austerity, but should Tsipras prefer he can call it frugality, as a change.The notion that Greece has reached the bottom and will rise is only true if the nation realize where it is, makes a plan and implements it. Until now it has been "we are planning to plan to make a plan", not very promising. The lasts self-imposed deadline of 27 April was changed to "sometime in August.And no, Greece did not have the "ability to do things that no other country could". She had the choice to make her own plan for 8 years, but she preferred to do nothing of or by herself. She preferred to be the suffering victim.Lennard.
Lennard:The plan was presented in the eurogroup already. And you can't have austerity and invreased productivity in a country like Greece where only 1/2 of the population works hard and long hours to support the other half.You need to stop thinking other cases and focus on Greece. And to focus on Greece you need to understand the subject matter. It's that simple.
Anomy? You are a "law and order" guy? Perhaps a strong junta supporter too.So in your non-opinion, a heavy hand of the law will whip Greece into shape. This is the stupidest thing I've ever heard. Do you want to move over and live in Turkey instead? Because for sure you are not Greek or a Greek we need to reside in Greece.
@ Mr. Plassaras.No, Greece did not present the "holistic comprehensive plan that will satisfy citizens, creditors and markets". Greece told the creditors what gifts the present government would like for Christmas, and asked sotto voce, "is that too expensive"?Lennard.
@ Mr. Lennard:"Greece’s new development plan, which will be presented in the Eurogroup of April 27th in Sofia, is in the final phase of preparation. The government has announced that the new model will be oriented towards supporting middle class, and has also stressed that the political message that will be sent to the partners, the markets and society will be that the country –after the end of the program- will fulfill its commitments regarding the fiscal targets as well as continue reforms and denationalizations.The development plan will aim, among others, at lowering tax rates by 3.5 billion euros, supporting small- and medium-sized enterprises and agriculture, supporting society also by raising minimum wage, and attracting foreign direct investments."It's now the 9th of May which means Troika has had the plan for more than 10 days.
Mr. Lennard:Please e-mail here to receive your copy: email@example.com://news.gtp.gr/2018/02/15/national-development-plan-set-stimulate-greek-economy/