Reality checks for Greece!

A sentiment seems to be developing in parts of Greek society that it is high time for Greeks to cease playing into the cards of foreigners who brutally pursue their own interests and do harm to Greece in the process. Before this sacrificial lamb sentiment gets carried away, a few reality checks are in order.

Government expenses – a reality check (2010; Eurostat)
Government revenues in Greece were equivalent to 8.300 EUR per capita. This is phenomenally less than the 13.200 EUR in Germany, 14.600 EUR in France and 16.300 EUR in Austria.
If Greeks had, on average, contributed 10.549 EUR per capita to the government, Greece would have had a balanced budget. With that 10.549 EUR per capita, Greeks would still have ranked by far at the bottom among these countries as regards per capita contribution to society.
Greek government expenditures were 49,5% of GDP; a very respectable figure compared to the 46,6% of Germany, 56,2% of France and 53,0% of Austria. Greece’s government revenues were only 39,1% of GDP, a miserable number compared to the 43,3% of Germany, 49,2% of France and 48,3% of Austria.
From all conceivable standpoints (be they ethical, moral, nationalistic, or whatever), it is simply inexcusable that the members of a society would not, in sum, contribute their fair share to society as a whole. Before Greeks protest against the powers that be in the EU, the salary-receiving and tax-paying Greeks should protest against their Greek compatriots who do not contribute equally to their society and who have in the process caused the state’s financial mess. Greeks cannot blame foreigners for bringing this damage upon society; they can only blame other Greeks for that (and Greeks themselves are the only ones who can correct that!).
The country – a reality check (2010; Bank of Greece)
Greece exported 17 billion EUR. With that foreign revenue alone, Greece could have afforded her oil imports and shipping; no more. Bye, bye cars, motorbikes, smartphones, etc. etc.
Greece generated another 13 billion EUR (net) of foreign revenue from services like tourism, shipping, etc. At the same time, Greece paid another 8 billion EUR (net) abroad, mostly for interest.
All told, Greece had 22 billion EUR foreign revenue and, with that, Greece imported 45 billion EUR. Living within one’s means? That is living 23 billion EUR beyond one’s means in just one year! The only ones who can correct that are the Greeks themselves!
If Greece decides to give those international financial powers the shaft and live within her means because Greeks, when not usurped by foreigners, can live very well within their means, then someone will have to find out in a hurry how 23 billion EUR can be spent less abroad or exported more, or a combination of both. Bye, bye cars, motorbikes, smartphones, etc.? Not quite; but quite a bit of that!
Export potential – a reality check (2010)
Greece exports olive oil in bulk to Italy where it is bottled, packaged and distributed all over Europe. Italy gets more than half of the margin on Greek olive oil and Greek producers get low prices which demotivates them to plant olive trees. And when there is not sufficient olive oil left in Greece because of that, Greece imports olive oil from Germany which Germany had imported from Italy and Italy from Greece.
Should one protest against Italians for taking advantage of Greeks by paying them only bulk prices? Should one protest against Germans for selling Greek olive oil back to Greece and taking a margin on top of that? Or should Greeks protest against other Greeks for not trying hard enough to export their products to end-consumers just like every other exporting country does? The only ones who can correct that are the Greeks themelves!
Economic potential – a reality check (McKinsey)
A study was published how Greece could create 500.000 new jobs within 10 years and 50 billion EUR in new GDP. The study was made by an international firm. Foreigners cannot read the study on behalf of Greeks and foreigners cannot initiate growth projects on behalf of Greece. The only ones who can do that are the Greeks themselves!
Conclusion of reality checks
There are many, many things which Greece could do on her own in order to improve her situation and this would earn Greeks great respect between Paris-Brussels-Berlin. The more Greece and Greeks concentrate on doing these things, the less time will be available for all those other things which damage the reputation of Greece and Greeks in the world.
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3 Responses to Reality checks for Greece!

  1. Friedrich says:

    This "revenues" are still way too much. In every country. So I hope the Greece will get it down to 1000 € max. That should be enough for a state to work. If not it's not that the "income" (what a nice word for robbery) is too low but the still way too big state. That all other states are way to big also is just proofed with the mentioned figures.

  2. Anonymous says:

    Reality check: see imports/exports in the 1990s. Just before the euro catastrophe. Reality check: See how prices exploded after 2001Just making a point, in 1994 the Greek trade balance was 0. Immediate huge cache inflows will do that to an economy… and you use the current once in a lifetime trade deficits, seen only after 2002 with the introduction of the euro, to tell a morality tale. Also tell me, if prices went up 4.5% a year in some store, and 1.5% a year in another, from were would you shop say, in 3 years time? And BTW since you can explain everything with olive oil, one would expect that Italy would have trade surplusses from your example… Does she? Or is Italy having the worse trade deficits in its modern history since 2001? Do you smell something?

  3. kleingut says:

    First regarding Italy: Italian exports in recent Euro-years covered imports by a little over 90%. The equivalent number for Greece is less than 45%.If you chose to consider my article as a morality tale, that is your privilege. I consider it more like common sense, namely: if a country spends more abroad than it earns abroad, it needs to import capital to finance the difference. Importing capital is not bad per se. It all depends which form it takes and what it is used for. If the capital which Greece imported since the Euro had come in the form of foreign investment, guest-worker remittances, EU-grants, etc., there would not be a problem today. However, it came mostly as debt. Consumption goes by, debt remains.I guess you “smell” that all of this could only happen because of the Euro. The Euro certainly accelerated the process but I am not sure that something similar would not also have happened if Greece had stuck to the drachma. What started all of this is that the financial system was full of liquidity and made loans like there was no tomorrow (otherwise sub-prime could not have happened). Hungary remained outside the Euro and was still a very willing borrower to banks who were more than willing to make loans (leading to the mind-boggling situation that foreign banks lent CHF to Hungarian banks so that these could make CHF-loans to Hungarian house buyers/builders!).You may say that the reality checks which I quoted are unfair given the structural consequences of the Euro (and I could agree with that) but they are still reality checks. And Greece will only begin moving towards a better future once it starts understanding/accepting reality and takes things from there (as opposed to retreating into the victim’s role).

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