This site is for archive purposes. Please visit for latest updates
Go to Top

Greece goes back into depression – having never left it

Mitchell, B. (2015) “Greece goes back into depression – having never left it“, Bill Mitchell Blog, 07 March.


Last Friday (March 6, 2015), Eurostat unveiled the latest – National Accounts estimates for the fourth-quarter 2014. All the Greek news this week will be about the – Letter – that the Greek Finance Minister sent to the president of the Eurogroup, in which he outlined 7 reform proposals. But it should be firmly focused on the fact that the Greek economy is back into depression having recorded two successive quarters of negative real GDP growth (despite the September-quarter data suggesting otherwise). The latest National Accounts data for Greece shows it contracted in the December-quarter 2012 significantly and the accompanying Labour Force data confirms that the unemployment rate is rising again and participation is falling. That is the disaster that the Eurogroup should be addressing. While they claim that internal devaluation will spawn growth through a burgeoning exports sector, the December-quarter 2014 data shows that exports contracted over the last three months of 2014. How long do the Greek people have to wait before the trade-led recovery nonsense is consigned to the nonsense bin?

The Greek letter to the Eurogroup was intended to be input into the on-going struggle between Greece and the rest of the Eurozone about the conditions that are to be attached to further bailout payments. It contains some rather odd proposals including one where various “non-professional” sleuths (“inspectors”) on a casual, never-to-be-rehired basis who will pose as “customers, on behalf of the tax authorities, while ‘wired’ for sound and video” to create an environment of fear among VAT tax dodgers.

The Greek government is hoping its Eurozone partners will provide them with some video cameras and training to make this possible.

It will then hire “students, housekeepers, even tourists in popular areas ripe with tax evasion” to send the fear of the tax authorities.

So if you see some fat German in bermuda shorts with a Head Cam wandering around shops in Greece and emitting strange clicking sounds (on and off) then he/she might be one of the Greek government’s new tax enforcers, defraying some of the holiday costs with a bit of casual work.


Relevant posts: