Greek GDP: The Shocking Reality Vs IMF Forecasts; And Who Is To Blame For The Greek Implosion

Tyler Durden's picture

With a Greek default, shortly followed by a Grexit, a collapse of the "irreversible union" (but... but... "political capital"), and ultimately the end of the latest European monetary union experiment (the latest in a long and illustrious series of prior failures) now seemingly imminent, the blame game has begun. As the NYT noted overnight "the recriminations that would then fly would be so bitter that they would inflict a second round of damage."

But who is really to blame?

Simple: anyone and everyone who willingly and voluntarily was complicit with the great "can kicking" bailout fiction of the past 5 years, and decided to stick their head in the sand when during the first bailout of Greece, followed promptly by the second bailout (and default to private creditors) when despite our (among many others) outcries that these piecemeal rescues do nothing to fix the underlying insolvency of Greece which requires a grand balance sheet reset, one where the Greece revenues and outlays are sustainable in the long-run and not just until the next all time high of the S&P500, everyone - from the top unelected European technocrat to the lowliest IMF and Deutsche Bank analyst peddled a lie that "Greece (and by extension Europe) was fixed."

For those still unconvinced that it was an absolutely epic lie, because while stocks were soaring as the lies piled up higher and higher, this is what happened. From Bruegel which is shocked, shocked to find that Greek GDP fell "much more than was foreseen in the adjustment programmes":

After 2010 the collapse of the Greek economy accelerated. GDP fell much more than was foreseen in the adjustment programmes. The big question is whether all of this collapse was inevitable given the unsustainable character of the pre-crisis growth model of Greece, or if the two Troika programmes exacerbated the output fall. 

Yes, it was inevitable, because just like the Troika pretended to reform the insolvent Greek balance sheet, so Greece pretended to implement structural reforms. Visually:


That this would happen was obvious to all but the most pathological Eurofanatics. They can be excused: they were ideologues and demagogues, whose failed vision will lead to at least one lost Greek generation.

It is all those others, who knew that what was shown above was coming and still pushed for every deal that would delay the inevitable and only benefit Europe's banks and lead to massive shareholders gains at the expense of one European nation's terminal collapse, who are truly at fault.

It is those people from whom the Greek population, which now truly has nothing left to lose, should demand an "explanation" if nothing more.

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kaiserhoff's picture

Fat lady singing in 5,4,3,...

macholatte's picture


But who is really to blame?


How about we start with the criminals who cooked the books at the very start of the fiasco so Greece could get into the EU? Those politicians who knew about it from Greece & France & Germany, etc. and the architect of the scam, Goldman Sachs.

Put them on trial first. The penalty would be confiscation of all their assets and those of their families and then being skinned alive as the half time show of the World Cup with “This Could be the Start of Something Big” played by a high school marching band from Greece.


That would be a good start.


Wolferl's picture

Throw those pathetic Greek deadbeats out of Europe already.


wendigo's picture
wendigo (not verified) Wolferl Jun 21, 2015 4:11 PM

Those Greeks you hate so much are people, but you don't care. You'd happily turn their country into a radioactive wasteland, just so you can feel smug. 

Wolferl's picture

I don´t hate the Greeks. You don´t hate the pimple at your ass. You just get rid of it.

epi_tis_thalassis's picture

bahhh... "skinning them alive" is nothing! just make them work in a supermarket until retirement at 67 and then have to survive at the pension they get

aminorex's picture

it is long past time for greece to recognize that they are in an actual state of war with europe.  a decapitation strike against the e.u. is their best hope. 

elegance's picture

And 35% of the rest of the GDP is depending on EU money.

Peribanu's picture

Excellent article, but it assumes that the farce is about to stop. I don't think that's a given, because there are too many vested interests still, on both sides, that will prefer more "extend and pretend" over the grand reset that's now needed.

RiverRoad's picture

Ah, but now Greece is PRINTING:  Blue light special on wheelbarrows....

NoDebt's picture

Hell, if they can print the billions to cover the bank outflows they can print a few more billion and hand the Troika the end of June payment in paper money, too.  Nice, crisp, fresh sequential serial number Euros with the infamos "U" at the front of the serial number.

Frankly, I'd be a little surprised if they weren't already doing a little of that up to this point.

kaiserhoff's picture

Are you suggesting some Clinton Foundation accounting?

Seasmoke's picture

WE need to get it thru our thick fucking heads........... GOLDMAN FUCKING SACHS!!!!!!!!!!

e2thex's picture

Runnin' on empty.




Niall Of The Nine Hostages's picture

This is nothing. The Soviet Union finally ran out of other people's money in 1991. Only now has Russia been restored to anything like her former economic estate.

The Athens stock market has fallen 60 per cent since its peak in 2010, which suggests Greek net worth has fallen about that much. That suggests real consumption will have to fall another 50 per cent---wages and pensions halved, a way found to do without another half of the work force, or some combination of the two---before West Turkey has any realistic chance of becoming investible again.

Any Greek who is dissatisfied with this is advised to find another place to live before Athens starts charging for exit visas.

chisler's picture

Thats bullshit the blame lies at the door of Goldman Sachs. They single handedly have sent Greece to the wall. Fuck that company, bunch of blood suckers, I hope they eventually collapse.

WTFUD's picture

The Troika and Goldman Sucks are getting away with so much creative gerrymandering that they've now grown accustomed to it.

Their bases are loaded with Governors of Central Banks and revolving door Gubby employees. A stranglehold on the entire system.

In a 50 page list of Death Row Banksters & Assorted Mercenaries, Goldman would take up 20 of those pages.

chisler's picture

Greece should have already started the drachma printers and paid the EU in Greek drachma. Goldman Sachs started the scam and I hope the Greeks respond with an appropriate scheme that suchs the EU and Goldmean Suckers into an even bigger implosion.

pasttense's picture

The chart above should be extended to include 2015. If it were I think you would see actual GDP turning down again


kchrisc's picture

"...And Who Is To Blame For The Greek Implosion"?

Zion's plundering, Zion's grifting banksters, and Zion's violence-puppets, government.

That was too easy. Give me one where I need to call my aunt Millie; a friend.

Liberty is a demand. Tyranny is submission..

atlasRocked's picture

Folks - socialism NEVER fixes it's debts:  Look at the track record.

disabledvet's picture

We're not rocking and rolling in the USA either.

Closet Boy's picture

Having resided in Europe during the 90's, I recall the populous being very excited about the monies being invested...unfortunately, when dealing with the Devil,  the ultimate payment will be Hell.  

The IMF (International Mafia Fund), and the likes,  will take what is owed to them. Best of luck Greece.

DutchMadness's picture

The Greecs should learn to keep up their pants by themselves, instead of begging for billions of free money the last two decades. Enough is enough. We in Europe are subject to austerity measures and the Greecs are spending it in their second homes on the islands. The average monthly wages are aprox 1000 euro in Greece, where the same is aprox 200 in neighbouring Bulgaria, Rumania, Macedonia and Albania. Sell your Porsches and ride your donkeys again. There is not such a thing as a free lunch.

silvermail's picture

In my opinion it sounds much better:

The Americans should learn to keep up their pants by themselves, instead of print for billions of free money the last four decades. Enough is enough. We in Europe are subject to austerity measures and the Americans are spending it in their second homes on the islands. The average monthly wages are approx $ 6,067 in USA, where the same as approx 200 in neighbouring Bulgaria, Rumania, Macedonia and Albania. Sell your Porsches and ride your donkeys again. There is not such a thing as a free lunch.

are we there yet's picture

America prints money to support the growing multi generation welfare class that feels entiteled to free stuff and lacks a work ethic.

NoWayJose's picture

The last time Europe had anything like a common currency over most of the countries, it didn't turn out that well for Napoleon Bonaparte.

chisler's picture

Goldmean Suckers set Greece up by engineering their entry to the EU becasue they did not qualify. Goldmean, engineered their entry to the EU,  and then waited to sell everything in Greece, short. Thats what Goldmean does. Fucking Schisters! Maybe a Goldmean weekend is what the world needs.

Salah's picture

E.U. never really got the Greeks (they're con-artists, all of 'em).  And the E.U. never had a military that could repo Crete.

brucekeller's picture

All things must come to an end, and it is a shmita year.

CHX's picture

So will it end as a sh(m)it a year ? 

SilvertonguedAngel's picture

Let the hunger games begin.

Seek_Truth's picture

And may the odds be ever in your favor.

CHC's picture
CHC (not verified) Jun 21, 2015 4:55 PM

OK - I've had it - I've had enough - I'm tired of this shit.  I'm the guilty ONE for all this turmoil going on with Greece, I did it all - so sue me.

chisler's picture

okay, what's your name, address and cell number. I plan to sell you short.

thurstjo63's picture

Zerohedge had already highlighted this 3-4 years ago.

Dark Daze's picture
Dark Daze (not verified) Jun 21, 2015 6:15 PM

One has to wonder if GS was acting alone, or on the behalf of a government or governments. You wouldn't really expect a private company to be so immune from the fallout of such a big deception, other companies have been put out of business for much less. Which leads me to wonder, who benefits besides GS?

Dark Daze's picture
Dark Daze (not verified) Jun 21, 2015 6:15 PM

One has to wonder if GS was acting alone, or on the behalf of a government or governments. You wouldn't really expect a private company to be so immune from the fallout of such a big deception, other companies have been put out of business for much less. Which leads me to wonder, who benefits besides GS?

Al Tinfoil's picture

The Euro was designed to eliminate exchange rate complications among the Euro nations that plagued trade and financial transactions. Super-competitive Germany got to export to the others while the banks provided financing to the sucker buyers/borrowers, but the buyers/borrowers could not adjust their exchange rates to compensate for their lack of competitiveness.

The banks had a field day lending to everyone in Euros on the implied guarantee that the EU and ECB would protect them. Germany has run huge trade surpluses with the rest of the Eurozone, financed by German, French, and Italian banks, but if Greece and the rest of the PIIGS do not pay up, POOF "and its gone". Goldman Sachs is said to have cooked Greece's books to get them in, but Germany, France, and the rest were only too happy to have more buyers/borrowers that they could turn into debt slaves customers. Athens was encouraged to try to build a social paradise, host the Olympics, and buy submarines and other arms.

Then, in 2008 it became abundantly clear to everyone that Greece and the rest of the PIIGS could never pay their debts. The French, German, and Italian banks were holding Greek Gov bonds, and IOUs from Greek banks that were suddenly worthless. The French, German, and Italian banks went running to the ECB, EU, and Merkel. "Bailouts" were arranged, which actually was a way for the worthless bonds and IOUs held by the German, French, and Italian banks to be bought by the Troika [IMF/EU/ECB] but the Greek taxpayers were made the debtors for it all, and austerity was imposed on Greece to ensure it would run budget surpluses so it could make debt payments to the Troika.

GDP plunged in the PIIGS, and they could not meet debt payments, so the Troika lent them more and more so they could make payments. This is "Extend and Pretend". Greek bonds were written down in 2010 and again in 2012 since there was so much red ink on its books.

Meanwhile, banks in the Euro zone have been holding all sorts of bonds on their books at face value, but if exposed to any scrutiny, it becomes clear these bonds are junk at best.  Greek banks are showing future tax credits as capital, and using this "collateral" for advances from the Emergency Liquidity Assistance program from the ECB to meet bank runs, and the ECB is going along with this fiction.

Banks all over the Eurozone are faking safety on thin ice. E.G. Austria's Hypo Adria bank melted down and was taken over by the Gov. Heta "bad bank", to be wound up in orderly fashion. Heta has collapsed, the Austrian federal Gov has withdrawn support, and litigation is increasing thick and fast between German banks and Austria over multi-MMM Euro losses. Some German banks have already had to write down capital, and one has had to get a bailout from Deutchebank. More fur will fly.

The EU imposed austerity everywhere to make everyone live within their means, but that quaint idea has been passe since 1971, when growth became growth of credit/debt. In the modern world, no debt growth = no GDP growth. But the EU also got all members into the Fiscal Stability Treaty, under which each country guarantees the debts of every other country. Kinda like sighing a guarantee of all the debts of your dead-beat relatives. Perfect!

Super-Mario Draghi got permission to start the ECB bond-buying QE program, supposedly just in time to forestall any meltdown of Euro-zone banks and governments, but somehow the QE Kool- Aid has not been strong enough to calm everything.

Then the EU levied sanctions against Russia because Obama and Nuland said it was a good idea. Trade with Russia, which had been the EU's fastest-growing export market, has plunged. Ukraine has turned into a tar-baby money-pit with neo-Nazi lipstick that nobody wants but that the EU and IMF seem to be inheriting.

Meanwhile, the volume of whistling past the European Bank Graveyard is increasing, along with cries of recrimination over who is to blame for Greece not going along with more Extend and Pretend. The greatest sin of Syriza, Tsipras, and Varoufakis has been to speak up about what a fraud Extend and Pretend is.

Without more "bailout" money from the Troika, Greece cannot meet its loan payments and will default.  Syriza was elected to get debt written down and austerity eased.  The Troika wants Greece to double down on austerity.  But if Greece gets more money or debt write-downs without sacrificing their first-born on the altar of austerity, radical political movements in the other PIIGS will be encouraged to seek relief from austerity in the form of debt write-offs, putting the fragile Euro banking system into a capital reserve crisis.


The EU has adopted that great Gallic institution,  "The French Farce", as official administrative policy.