Greek Economy Grinding To A Halt As Daily Protests Cripple Industrial Production

Tyler Durden's picture

One thing that the brilliant Eurozone Keynesian shamans appear to have missed is that with the Greek economic production base (read its population) offline and protesting now virtually every day, thus completely unmotivated to actually generate incremental output, the entire Greek economy will soon grind to a halt: the latest confirmation - plunging Industrial Production, which dropped by 11% Y/Y in April, the worst economic performance since the first half of 2009. Guardian reports: "Esa, the state statistics agency, said the decline was caused by falls in the main sectors of Greek production - mining, manufacturing, electricity and water supply production. Mining fell by 6.4pc, manufacturing decreased by 11.3pc, electricity production dropped 12.2pc, while the water supply declined by 6.8pc. Greece's economy is struggling to emerge from a deep recession fueled by austerity measures taken to rescue the economy from near-bankruptcy last year." And these are the economic conditions that according to the Troica deserve a passing grade? One wonders what would force the Greek economy to get an F in Keynesianism. One also wonders how the Greek economy is supposed to rebound and cut its deficit to IMF-mandated thresholds as more and more economic capacity is eliminated and the Greek workers simply fall back on their socialized benefits and lieu of a 9 to 5 job (and retire as soon as possible to be grandfathered by existing clauses in advance of what Bailout #1298 will dictate will soon be a 100 year old retirement age).

As for that bailout, even that is no longer certain:

The indebted nation is expected to need more help in coming years, with estimates putting the sum at up to €100bn on top of an EU/IMF package granted last year worth €110bn.

Yesterday, the German business daily Handelsblatt quoted a "high-ranking European diplomatic source" who said that approval of a second rescue plan for Greece might be delayed because of resistance within the 17-nation eurozone.

Expect comparable economic data out of the other PIIGS shortly.

h/t John Lohman

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youngman's picture

"emerge from a deep recession fueled by austerity measures"....that is not the reason they are tanking...they have been spending more than they take in...and borrowed to much...the austerity measures came later...and needed 10 years ago..

TheTmfreak's picture

Thats how it all works. I still haven't really formed a definitive opinion on the matter of whos "fault" it is. I guess its just some hazy amount between government, corporate, and the people. None of the shit could have gone through without the people buying into it (literally and figuratively).

At least in the US you have the government working on autopilot in many cases forcing the people to buy or not buy things they do or don't want and therefore putting themselves in a worse position.

Its also like the housing market. Do we blame the people for taking ridiculous credit deals for houses (further driving up costs) or the people giving them the loans? I'll just leave it at both are at fault, and the whole system is fucking corrupt.

knowless's picture

the opportunity shouldnt exist, both parties are needlessly greedy and fucked those that aren't over.


is it the prostitute or the john? niether, it's the pimp who's exploiting the status quo.

Hacksaw's picture

You need to read/listen to Bill Black on "control fraud". He explains that control fraud forces out the honest. Fraudulent lenders force out honest lenders because the honest can't compete. Fraudulent loans artificially inflate prices forcing non-speculative buyers out of the market. Granted there were some speculators who borrowed under false pretenses but the harm they did to the economy was a drop in the ocean compared to the harm by the fraud of the TBTF financiers and their bribed stooges in the government. I vote to hang the financiers and their lackeys.

StychoKiller's picture

Like every other major problem, this one can be laid at the feet of govt(s).  Govt(s) subsidize low-cost loans to unqualified buyers, then scratch their heads when the Greed level leads to a Humungous Bubble!

Re-Discovery's picture

Good luck collecting taxes when there is no economic activity to tax.  Revolution is the obnoxious drunk ready to tip over the punchbowl at the ECB bailout party.

topcallingtroll's picture

default is now a certainty.  They can do it now and minimize the pain, or wait until default is forced upon europe and greece.  Waiting until default is forced  will inflict maximum pain, but is of course the typical action of governments

ElvisDog's picture

Yep, that's the "correct" path for revolution, just simply stop all economic activity. It's non-violent and hits statist governments at their most vulnerable spot. No economic activity means no taxes which means no support for those employed by the state.

youngman's picture

They don´t pay taxes now...its a comedy how they hide their incomes....

speedy's picture

If the Greeks raise their retirement age to say 35, will those that are already retired and are not yet 35 have to find a job?

If so, I can understand why they are protesting.

Id fight Gandhi's picture

Your avatar just reminded of how lousy Greek women are in bed.

ZeroPower's picture

Yup, truly astonishing how the Greeks don't even want to (can't) help themselves.

Expect comparable economic data out of the other PIIGS shortly.

I'd remove Ireland from there,  where the bailout (and further political uncertainties) seems to have worked actually in favor of the country.

THE DORK OF CORK's picture

Typical Canadian viewpoint - I guess you want us to be another Newfoundland again.

ZeroPower's picture

Explanation required.

And whats Newfoundland?

THE DORK OF CORK's picture

@Zero Power

I assume you may have considered Ireland a independent country up until recently but that would be a incorrect assumption in my opinion.

We had all the cosmetic appearances of a sovergin country but in fact from a economic perspective was always a part of Britain at least until European entry - we were  essentially a self governing entity with perhaps more cultural and poltical independence then Newfoundland when it was a Dominion - these illusions have been kept in their little island box for half a century or more.

Now not unlike Newfoundlands economic crisis of the 1930s we are being propelled towards the control of a more continental power focus which is prepared to take direct control of our internal affairs as that is a continental tradition ( The British given the stretched nature of their empire over the centuries have learned to keep their distance as long as a appropriate economic rent is serviced)

ZeroPower's picture

Wasn't aware of the intricacies in your quasi-sovereign state status, so appreciate the info.

Nfld is given very little real attention here in Canada and as such i am only slightly aware of their status as a province.

THE DORK OF CORK's picture

in name yes we were independent but the Bank of ireland (a commercial bank that produces Sterling Notes in Northern Ireland )was the republics lender of last resort until the 70s - which is under the BOE sphere of influence.

Once we came under the wing of the Continental European banks in the 70s and 80s we were allowed a proper "independent central bank". (previously we only had a currency control Board)

THE DORK OF CORK's picture

One mechanism that could be used to cut the fiscal deficit of the periherial countries is the direct payment of money from the IMF / ECB / Brussels domestic budgets to fund the politicans and upper level civil servants withen these countries.

It makes logical sense now as we have taxation without representation . ..... perhaps the IMF can sell some of its Gold for day to day expenses and the like.

Hell they can fund the entire police state directly..... oh I mean police service

 Sorry just saying.

Id fight Gandhi's picture

Will Greece collapse on it own now, or with the whole eu.

They aren't going to austerity, they'll just piss away the days.

topcallingtroll's picture

I have just realized that schadenfreude is the greatest of pleasures, even if I don't know how to spell it.

Id fight Gandhi's picture

Love the German language, they word for everything. "taking pleasure in the suffering of others."

wombats's picture

Did Greece have an economy in the first place?  What do they produce besides welfare checks?

topcallingtroll's picture

Barriers to entry to various services to maintain non competitive wages and a non productive economy in need of permanent subsidy.

That is the main greek product.

StychoKiller's picture

For some reason, I was thinking grapefruits... :>D

topcallingtroll's picture

This is so funny because the Greek people have now guaranteed default!

There is nothing that can be done.  Germany will not permanently subsidize the Greeks.  They will cut their losses soon, or a new fringe radical german political party will form a government and end the subsidies.  They can do it now while it is not quite as painful as it will be later with radicalized european politics and a worsening economic situation.


Of course the germans will delay the default to the point it will inflict maximum pain on germany and europe.  It is human nature!

markytom's picture

I thought Greece was selling off mining, electricity and water supply production - so any profits going outside of the country wouldn't be used to help pay off the debts anyway. Look at the Greek fire sale going on:

Zoran's picture

The economic collapse is happening at a rapid rate. Most citizens live in a economic situation they neither comprehend nor gain from. The reality is realestate speculators sowed the seeds of their own downfall by bidding up asset values using unsustainable leverage and easy credit -- a way of life that become entrenched in culture until every idiot out there was certain asset price can't drop back to past levels when average wages could afford average homes. Check out the ridiculous comments from property spruikers on forums such as the Australian Property Forum to see how entrenched is this "markets always rise" myth! US governments have a woeful record in providing a fair asset markets. Many European countries have better models that operate more equitably for everyone, yet even still, those Euro countries must still bail out their banking systems. Anyway, the moral is no one gains from asset price inflation in the end, because bubbles always pop. Steve Keen has been redicting this outcome for Australia too . Sure, we hear claims from the spruikers that prices will rise forever, but when most people are priced out of the market then something has got to give. Now the ponzi scheme is finally collapsing (it was inevitable), and so today's underclass will have the last laugh when asset values do drop up to 50%, which is happening already in many places around the world. Steve Keen has been predicting this outcome for Australia too, and it seems to be happening with the economy contracting last quarter and the real estate industry on it's knees. Auction clearance rates in Sydney and Melbourne have totally collapsed. High house price and debt offer zero benefit to anyone. The capital should have been directed into productive sectors of the economy instead! Zoran Slaveski Australia's Housing Affordability Crisis Forum

tejbear's picture

Looks like the sheople/zombies of Greece are awakening, and they seem pissed off...

Talk about revolution,... if everyone just stops working, the economic pressure will build until changes occur that placate the masses. Or,... will they move up some other disaster.

I am betting that Greece will not get to keep their gold... for the fiat paper loans they received.

AldoHux_IV's picture

Far worse than depression and inflation (I leave deflation out as it only harms the top 2%) is when the people have lost all faith in the system which is the only logical step when you see that policy is geared towards robbing them of any prosperity and individuality.

Hope the protesters will one day regain their sovereignty back.

RKDS's picture

Greek production?  WTF is made in Greece?  God that's even harder than finding stuff made in USA!

aerial view's picture

Could the Greek style of protests be sheer genius by shutting down the economy and eventually the govt until reform is made?

Whatever one's view, they have more guts than TBTB "too busy to be bothered" Americans.

carbonmutant's picture

Can Greeks be taught to manufacture goods the rest of the world wants?

for a dollar more's picture

The internal Greek economy is doing fine; it is just that they cannot afford the cost of their government. This is the problem all over; people can no longer support their expensive mismanaged overreaching governments. So in the end they will all collapse. We "the productive people" will be better off when it happens. The US is not far behind Greece in this respect. The global system of Babylon is collapsing. This is reason to rejoice!

Element's picture
Greek Economy Grinding To A Halt As Daily Protests Cripple Industrial Production


Nothing another austerity package can not fix. ... they do it to themselves!  /s