Greece - a crime is being committed before our very eyes

15 novembre 2012
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Translated by Anne-Marie de Grazia, with all my thanks.

The Greek agency of statistics (EL.STAT) has just published its latest data (Grèce PIB trimestriel) and it begs to differ with the "observers" who are betting on the situation getting better in this unfortunate country. In fact, the economy is continuing its collapse, on an ever steeper downward curve. In constant value, GDP has gone from 211 billion euros to 171 billion euros, that is a cumulated decrease of 19% since the first quarter of 2009. We are being spectators to a true disaster.

Graph 1.

 

The rapidity of this collapse is due to several factors. First, there are the austerity policies called memorandum imposed upon Greece by the European Union by way of the Troïka - IMF, ECB, EU. From this point of view, the French government, which has agreed to align itself on the diktats of said Troïka, bears an undeniable responsibility in the catastrophic evolution of the Greek economic situation. Second, the contraction of credit and the ensuing development of a barter economy, themselves direct consequences of memorandum policies lead to an acceleration of the process of collapse. Whole sections of the Greek economy are stalled, not because to a lack of customers (particularly in the export trade), but because they can no longer finance the production cycle. At the same time, other sectors are leaving the official economy because of the development of barter practices. In fact, one can consider that one third of the population survives on barter, and through systems of local payments. Which is to say that one part of Greece has already, in fact, left the euro-zone. This phenomenon seems to be on the increase. It should, in a relatively short-term, provoke a collapse of fiscal resources, which are of course paid in euros. A de jure exit from the euro zone will conclude this de facto process, whether or not it pleases to M. Samaras, who is a party to the strangling of his country.

This explains why the European Commission got regularly off the mark when trying to assess results of memorandum policies. This has been explained on the blog of the Real-World Economic Review in a pepre recently posted by Jesse Frederic ( http://rwer.wordpress.com/2012/11/09/folly-from-olly-the-disasterous-quality-of-the-economic-predictions-of-the-european-commission/ ).

Consumption has shrunk very strongly, as revealed by a document of the Greek statistical office (Grèce retail trade). There, one can take the measure of the social catastrophe which is playing out in that country. In comparison with 2005 levels, the level of retail sales has gone down 24%, 15% in the domain of food production. If one can hope that this decrease is partly compensated by the development of barter networks for food and everyday consumption, this cannot apply to some other forms of consumption such as utilities and services (education, health).

Graph 2

Beyond the economic and social catastrophe, we are spectators to a human catastrophe. A crime is committed under our very eyes. A crime which our governments had - and still have - the means of avoiding. But they refuse to consider the idea of a Greek default, although the latter is unavoidable, and do not cease demanding ever more sacrifices from a population at the end of its tether.

We bet that the French President M. François Hollande, a trusty representative of compassionate socialism, will shed a tear over the poor Greeks. One tear, not two...

Citation

Jacques Sapir, “Greece - a crime is being committed before our very eyes”, published on the carnet Russeurope 15/11/2012, URL: http://russeurope.hypotheses.org/500

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Jacques Sapir

Ses travaux de chercheur se sont orientés dans trois dimensions, l’étude de l’économie russe et de la transition, l’analyse des crises financières et des recherches théoriques sur les institutions économiques et les interactions entre les comportements individuels. Il a poursuivi ses recherches à partir de 2000 sur les interactions entre les régimes de change, la structuration des systèmes financiers et les instabilités macroéconomiques. Depuis 2007 il s'est impliqué dans l’analyse de la crise financière actuelle, et en particulier dans la crise de la zone Euro.

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Présentation

Ce carnet a pour fonction de rendre accessible mes travaux, qu’il s’agisse de working papers, de note de positionnement ou de notes brèves, portant sur l’économie européenne et sur la Russie. Il comprend des textes qui portent à la fois sur la crise de l’Euro et les origines de cette crise et sur l’économie de la Russie (depuis les problèmes macroéco- nomiques jusqu'à ceux de l'économie régionale, en passant par la finance).

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This blog aims at the dissemination of some of my research works, including working papers, position papers or brief notes focusing either on the Russian economy (from macroeconomy to regional economics and finance) or on the European one, with a special attention to the Eurozone crisis.

Jacques Sapir

Jacques Sapir

Diplômé de l'IEPP en 1976, a soutenu un Doctorat de 3ème cycle sur l'organisation du travail en URSS entre 1920 et 1940 (EHESS, 1980) puis un Doctorat d'État en économie, consacré aux cycles d'investissements dans l'économie soviétique (Paris-X, 1986).
A enseigné la macroéconomie et l’économie financière à l'Université de Paris-X Nanterre de 1982 à 1990, et à l'ENSAE (1989-1996) avant d’entrer à l’ École des Hautes Études en Sciences Sociales en 1990. Il y est Directeur d’Études depuis 1996 et dirige le Centre d'Études des Modes d'Industrialisation (CEMI-EHESS). Il a aussi enseigné en Russie au Haut Collège d'Économie (1993-2000) et à l’Ecole d’Économie de Moscou depuis 2005.

Il dirige le groupe de recherche IRSES à la FMSH, et co-organise avec l'Institut de Prévision de l'Economie Nationale (IPEN-ASR) le séminaire Franco-Russe sur les problèmes financiers et monétaires du développement de la Russie.