lazy? oecd: average greek worked 2,120 hours in the crisis year of 2008. that is 690 hours more than...
TRANSCRIPT
Ethnoessentialist narrative
“GREEKS” are: LAZYCORRUPTPRONE TO DEBTSPENT TOO MUCH ON WELFAREWANT TO BE EMPLOYED BY STATE
Lazy?
• OECD: average Greek worked 2,120 hours in the crisis year of 2008. That is 690 hours more than the average German, 467 hours more than the average Brit, and 356 more than the OECD average.
Debt Prone?
• A European Central Bank study shows that in 2007-2009 forty-four per cent of eurozone households had debt. In Greece only 37 per cent did. Incidentally, Germans, who have often taken to lecturing Greeks on the virtues of thrift, were found to be ten percentage points more prone to getting indebted than the Greeks. p. 5, (European Central Bank, 2013)
Corrupt?
• In the Eurozone decade before the crisis, Greece scored somewhere between 4.2 and 4.6 points, continuously improving, on a Transparency Corruption Perception scale where ten is perceived to be the least corrupt. This put Greece in positions 42nd to 56th, on par with countries such as South Korea, the Czech Republic or Slovakia. Some other countries that have been hyped as success cases in the initial crisis years, such as Poland: position 70.
Average retirement age (Eurostat)
Social spending as % of GDP - Eurostat
2001 2002 2003 2004 2005 2006 20070.0
5.0
10.0
15.0
20.0
25.0
Euro area Greece
Spending on public sector employees as % of GDP - Eurostat
2001 2002 2003 2004 2005 2006 20079
9.5
10
10.5
11
11.5
12
Euro areaGreece
Total government expenditure as % of GDP - Eurostat
2001 2002 2003 2004 2005 2006 200741.00
42.00
43.00
44.00
45.00
46.00
47.00
48.00
49.00
Euro areaGermanyGreece
Total government revenues as % of GDP - Eurostat
2001 2002 2003 2004 2005 2006 200734.00
36.00
38.00
40.00
42.00
44.00
46.00
Euro areaGermanyGreece
GDP Growth Greece
1961-65 1966-70 1971-75 1976-80 1981-85 1986-90 1991-95 1996-20000.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
Greece EU
Greek debt dynamics
19811982
19831984
19851986
19871988
19891990
19911992
19931994
19951996
19971998
19992000
20012002
20032004
20052006
20072008
20092010
20112012
0
20
40
60
80
100
120
140
160
180
Papandreou: welfare state, no taxes
1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 198920
25
30
35
40
45
50
55
EU14 general government expenditureGreece general government expenditureEu14 general government revenuesGreece general government revenues
Wage share of GDP
1970 1975 1980 1985 1990 1995 2000 200550
52
54
56
58
60
62
64
66
68
Greece EU15
Greece in debt trap by 1990s!
1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
-10
-5
0
5
10
15
20
Primary deficit Debt service
Nominal yield on reference gov bonds
1995
2000
2005
2010
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
Belgium Germany Greece Italy
Debt stable during Eurozone!
2000 2001 2002 2003 2004 2005 2006 200792.0
96.0
100.0
104.0
108.0
Eurozone not optimal currency area! (Kaltenbrunner, Lapavitsas et al.)
2001 2002 2003 2004 2005 2006 2007 2008 2009
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
Germany IrelandGreeceSpainItalyPortugal
Not a productivity issue! (Kaltenbrunner, Lapavitsas et al.)
But a wage issue! (Kaltenbrunner, Lapavitsas et al.)
Eurozone current account imbalances (Kaltenbrunner, Lapavitsas et al.)
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
GermanyIrelandGreeceSpainItalyPortugal
2010: Whom they really saved: bank exposure to euro periphery (BIS)
FRA GBR USA NED ESP BEL JPN PRT ITA0
50
100
150
200
250
300
350
400
450
500
ESPPRTIRLITAGRE
Austerity is bad: debt growth
Forced bailouts
• 3-5% of GDP in offshore annually (Cyprus, UK)• military expenditure 3.5% each year:
France, Germany sold €1bn worth of military to Greece in 2010
• bailed out 4 biggest banks twice• 87% of Troika loans sent to Greece spent on interest
payments• would need 6-8% growth to get out of sovereign debt trap• Germany borrows at 0%, lends at 5%, saves banks,
parades as saviour
Syriza victory January 2015
• Syriza is falsely portrayed as “extreme left”• Thessaloniki Programme: Keynesian / Nordic
model programme• Accused of secret plan to take Greece out of
euro: turned out not to have “plan B”• Campaigned and won two mandates: 1.) keep
Greece in Eurozone 2.) End austerity
European Union asphyxiates democratically elected government
• ECB introduces QE in Jan 2015, but does not extend it to GR: with 2.2% refinancing rate this could be a solution
• Even though GR commercial banks pass stress tests at end of 2014, they are not allowed to accept GR government bonds as collateral
• Eurogroup (ad hoc body w not rules) denies democratically elected GR gov its own policies
• Threat of Grexit leads to deposit flight• As a consequence Greek commercial banks go into Emergency
Liquidity Assistance (ELA)• ELA is then capped, forceing GR gov to close down banks and
introduce capital controls• Tsipras capitulates in spite of 62% OXI. (85% of young people voted
OXI)
ECB used for political pressure
Paul de Grauwe, Charles Wyplosz, Barry Eichengreen (leading neutral Eurzone experts): - ECB moves against the statutes- ECB used to apply political pressure
2015: Third Memorandum
• New taxes will suppress GR economy• Automatic (de)”stabiliser” austerity• Unparralelled deregulation (pharmacies, milk)• Privatisation against European trend (utilities)• No measures against offshore, reversal of transfer
pricing law, no cutting of captured state by oligarchs• Reversal of humanitarian measures• Reversal of collective wage setting (in place in 12 EU
member states)
THANK YOU!