HOW POLICY DECISIONS INCREASED THE PROFIT / WAGES RATIOAND DRAGGED THE ECONOMY INTO DEPRESSION

GREECE, 2010-2014

THE PROFIT / WAGES RATIO IS GROSS OPERATING SURPLUS ON COMPENSATION OF LABOUR ADJUSTED FOR SELF-EMPLOYMENT. DATA: AMECO, EUROPEAN COMMISSION, WINTER 2014

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RESTRICTIVE FISCAL POLICY

-20%LOWER

GDP

FEWER JOBS

HIGHER UNEMPLOYMENT

+800.000persons

LOWER WAGES

-18% nominal -23% real

LOWER WAGE BILL

DOMESTIC PRICES DECREASED TO A

VERY LIMITED EXTENT DESPITE A 16% UNIT LABOUR

COST DECREASE.

UNIT LABOUR COST

LABOUR PRODUCTIVITY

-1.9%

-16%

-1.7%

FIXED CAPITAL INVESTMENT

HIGHER PROFIT / WAGES RATIO

+27%

PRIVATE CONSUMPTION

FINAL DEMAND

-34% nominal -39% real bef. tax~50% after tax

excluding managers

NET EXPORTS

EXPORTS GOODS & SERVICES

+11% contribution

to GDP

IMPORTS GOODS & SERVICES

+2% contribution

to GDP

-10% contribution

to GDP

-23% contribution

to GDP

-890.000 jobs

high propensityto consume

low propensity to consume

accelerator

poor export performance

+13% contribution

to GDP WAITING FOR

DEUS EX MACHINA:A RISE IN THE LEVEL OF

DEMAND IN EXPORT MARKETS

imports collapsed as a

result of depression

fixed capital investment is ~50% lower than in 2009

import collapse leads

to current account surplus