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The 'Other' Biggest Greek Problem: Shipping
Simply put - the Greek economy still consumes more than it earns. Despite a 25% contraction in its economy, a plunge in domestic consumption and a sharp decline in imports, as WSJ reports, Greece is still exporting less than it imports, i.e. its current account is still negative. The reason... Shipping.
Greece has enough problems, from food shortages and cash shortages to unemployment and suicides, but, as The Wall Street Journal blog notes, without a large current-account surplus, the Greek government and Greek companies will have big problems repaying the debt owed to creditors throughout the eurozone and at the International Monetary Fund.
Why haven’t those surpluses materialized? One reason was the sheer size of Greece’s current-account deficit: It peaked at 16.5% of gross domestic product in 2008. Without the ability to devalue its currency within the eurozone, erasing that deficit through cuts in relative wages and prices was always going to be a long and grueling process.
Wages across the Greek economy have fallen sharply, but Greece’s performance in the export of goods and services has been among the weakest in the eurozone over the last seven years:
Greece’s merchandise exports have actually performed quite well:
The fault lies in Greece’s exports of services, which slumped post-crisis and never recovered:
- The Wall Street Journal
Look no further than shipping for an explanation here.
One of Greece’s main services exports is its large shipping industry. And after 2008, the economic crisis and a glut of new ships hitting the market caused global shipping rates to collapse; prices haven’t really recovered at all since. Greek exports of transport services – the vast majority of which are sea-freight exports – fell from €19 billion in 2008 to €12 billion in 2013.
And finally, to get a flavor of how 'uncompetitive' Greece was in 2008, even at record-high shipping rates, Greece's current defict was nearly 16% of GDP...
So while the world points its finger at "lazy" Greeks, it appears their biggest problem is global growth and weak demand... the same as everyone else.
Charts: Bloomberg
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Dysfunctional and the population refuses to do anything while the government promised everything and the ECB's don't care as long as they get their money. Things will not end well.
The population doesn't know better, just like everywhere else in the world. Teach a whole country (or world) that wealth is to be made by cheating, receiving bribes or welfare, and evading tax, and you get an irreversible status quo. No politician has an incentive or power to change it, nor do the citizens have an incentive or wisdom to ask something different.
Since when is paying taxes a good thing?
For whom?
Easy words from the couch?
They need to ship the Marxists out!
BDI soon to be renamed Baltic Dry Dock Index...
Let me tell you. I know a country that has had an annual trade deficit for 30+ consecutive years. Wonder how it's doing.
A military analyst has told Fox News that the only way to turn the tide in conflict in Eastern Ukraine is to “start killing Russians.” The former general alleged there are 12,000 Russian regular troops currently “camped” on Ukrainian territory.
http://rt.com/usa/239633-scales-ukraine-kill-russians/
Simply put the United States economy consumes more than it produces.
Then the Federal Reserve covers it up by printing US Dollars out of their butt.
Ship to ship combat, eh?
https://youtu.be/6v5VahaEL7s?t=2m50s
American and Israeli military advisors were arrested while aiding Islamic State terrorists in Iraq
Read more: http://sputniknews.com/middleeast/20150307/1019201301.html#ixzz3U6lVWYDJ
Why am I not surprised. At least the Iranians/Iraqis, possibly also Syria, now have leverage on the West. Could this be the reason why Obama is so eager to negotiate with Iran on nuclear deal, remains to be seen. This is also could the primary reason why Iragis didnt want US to be involved with the attack on Tikrit, because they know US/Israel's involvment with ISIS.
I'm pretty sure the last time I heard (or read) the words, "Greek Shipping Magnate," one was marrying Jackie Kennedy.
their services are hard to export :)
Really?
The shipping?
Otherwise Greece could well afford the TBTF banksters and militarists (NATO?),
and Greece's problems would go away (an EU-US paradise?) ?
FYI
Greece appears to have the 7th HIGHEST per capita military expenditure in the world,
higher than France or the UK !
http://en.wikipedia.org/wiki/List_of_countries_by_military_expenditure_p...
They have to be ready in case those Persians pop in again.
Things will get worse both in Greece and elsewhere.
That is all you need to know and all you need to prepare for.