Greece, cognitive dissonance edition
Did I ever tell you that the extremely hostile reaction of the Troika towards the Syriza government made it miss a unique chance? Well, it did. As I see it, the window of opportunity has closed. For the first time in decades Greece had (and still has) a responsible government. But all available Troika-energy was directed at derailing the Greek economy, corrupting information, saving the Troika ego’s and toppling Syriza. I’m afraid the derailment program succeeded, despite the green shoots mentioned below.
The State budget balance records a deficit of EUR 508 mn over January- April 2015, against the target of deficit of EUR 2.9 bn set in the 2015 budget, and significantly lower than for the same period of 2014 (when the deficit was EUR 1.15 bn). The State budget primary balance records instead a surplus of EUR 2.16 bn over the first four months of the year, against the target primary deficit of EUR 287 mn. This implies that in cumulative terms the State primary balance has over-performed the target by as much as EUR 2.45 bn
Mind that, at the same time, industrial production is growing at a 5% rate, gross exports at a 14% rate (first quarter), construction at a 50% rate (thanks to an investment program) while tourism seems to increase at an about 8% rate (turnover). At this very moment, lack of money is however derailing the economy – something which could have been prevented if the ECB had guaranteed (as it should have done) Greek bank deposits. One statement would have been enough. From Ekathimerini:
A lack of cash availability accounts for 84.3 percent of the delays in payments among domestic enterprises this year, the barometer of transaction behavior used by international credit insurer Atradius has shown, as uncertainty has seen the economy slip back into the red. Atradius noted that while the share of Greeks who cited the lack of cash as the main cause for payment delays had declined significantly last year, “this year the rate has rebounded reflecting the increase in the country’s solvency risk.” There was a similar increase in payment delays by foreign clients, reaching 57 percent of survey respondents, a rate that is some 20 percent points higher than in Western Europe. Two in every five respondents answered that the main challenges to the companies’ profits in 2015 is maintaining a sufficient cash flow and collecting dues