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Greek Economy Faces Total Collapse As Doctors Flee, Retail Sales Plunge 70%
Back in May we outlined the cost to the Greek economy of each day without a deal between Athens and creditors.
At the time, a report from the Hellenic Confederation of Commerce and Enterprises showed that 60 businesses closed and 613 jobs were lost for each business day that the crisis persisted without a resolution.
Since then, things have deteriorated further and indeed, with the imposition of capital controls, businesses found that supplier credit was difficult to come by, leading to the very real possibility that Greece would soon face a shortage of imported goods, something many Greeks clearly anticipated in the wake of the referendum call as evidenced by the lines at gas stations and empty shelves at grocery stores.
As a reminder, here’s what WSJ said earlier this month:
Wholesalers can’t pay for supplies. Importers’ foreign counterparts won’t trade.
Greece’s cash crunch hit small merchants first. They are less able to get credit from their suppliers, especially those dealing in perishable products that are continually imported. Christos Georgiopoulos owns a gourmet supermarket in Plaka, a picturesque Athens neighborhood frequented by tourists. He sells Champagne and Russian crab legs.
Nobody is buying. "I haven’t had a single customer in two days," he said Wednesday. He is shutting down his shop and says he doesn’t know when he will reopen. He gave some crab legs to his workers and is taking some home. "I haven’t paid my staff and don’t know if and when I will," he added.
And then there was this rather disconcerting commentary from AFP:
Greece's dive into financial uncertainty is forcing struggling businesses to take unusual steps to survive, including hoarding euros in cash.
Businesses which import their raw materials have been the hardest hit, says Vassilis Korkidis, head of the National Confederation of Hellenic Commerce (ESEE).
As unease spreads, getting ones hands on cash has become a sort of national sport, with businesses from restaurants to car mechanics telling customers paying by card is no longer an option.
The inevitable result of the above is that banks’ already stratospheric NPLs are set to rise further meaning that with each passing day, the banking sector’s recapitalization needs grow as the economy sinks further into depression.
Perhaps now that the "Quadriga" (the new moniker for Athens’ creditors which was ostensibly adopted to reflect the fact that there are now four institutions involved rather than three but which incidentally conjures images of the triumphant statue atop the Brandenburg Gate in Berlin) has touched down in Athens, creditors’ "technical teams" will get a good hard look at what happens when you force deep fiscal retrenchment on a country whose economy is collapsing and then rub salt in the wound by cutting off liquidity and enforcing capital controls.
Here’s some color on just how dire the economic situation has become, via Kathimerini:
Turnover in retail commerce is posting an annual drop that in some cases amounts to 70 percent even though the market is in a sales period. Capital controls have prevented Greek consumers from shopping, while even foreign tourists appear reserved due to the increased uncertainty on developments in Greece.
An extraordinary meeting of the board of the Hellenic Confederation of Commerce and Entrepreneurship (ESEE) on Monday heard data from representatives of local associations that pointed to an annual drop of between 40 and 70 percent since the capital controls were imposed.
In Athens, the decline came to 40 percent, while in markets outside the city center it was even greater. Thessaloniki and Piraeus reported a 60 percent fall and Trikala, in central Greece, a 60-70 percent shrinking. Even tourism hotspots such as Rhodes had a 50 percent decline in turnover.
And a bit more from Greek Reporter:
The Athens Medical Association (ISA) warned about major shortages in medical staff over the next years, since an increasing number of Greek doctors, especially those working in highly specialized fields, and nurses are looking for jobs abroad and leaving the country.
According to the association’s figures, more than 7,500 doctors have migrated to other countries since 2010. It was reported that in the first six months of 2015, ISA issued 790 certificates of competence, an official document required for medical sector employees who wish to work abroad. However, the report also noted that up until 2009, on average, 550 doctor were taking jobs abroad each year.
"One of the biggest losses in the crisis has been that of great minds," ISA chief Giorgos Patoulis stated to Greek newspaper Kathimerini. "In a short time, the national healthcare system will have an aged personnel and will be unable to staff services."
Furthermore, the data showed that a total of 8,000 unemployed Greeks have been forced to look for job opportunities abroad. The Greek Nurses Union announced that it issued 349 certificates just last year, 357 in 2012 and 74 certificates in 2010.
And don't expect this situation to improve any time soon because despite the passage of two sets of prior bailout measures, still more austerity will need to be pushed through the Greek parliament if Athens hopes to activate bailout funds by August 20, in time to make a €3.2 billion payment to the ECB. Here's Reuters:
"More reforms are expected from the Greek authorities to allow for a swift disbursement under the ESM. This is also what is being discussed right now," [and EU Commission spokesperson] said.
The banks have reopened after the ECB increased emergency funding but capital controls remain in place. Doubts persist about whether a severely weakened Greek economy can support another programme after a six-year slump that has cut output by a quarter and sent unemployment over 25 percent.
Among politically sensitive measures held back from the initial package were curbs on early retirement and changes in the taxation of farmers to close loopholes that are highly costly for the Greek state. A source close to the talks said these reforms were expected to be enacted by mid-August.
However, touching pensions is sensitive with Tsipras's left-wing Syriza party, which has already suffered a substantial revolt over the Brussels agreement, and the main opposition New Democracy party opposes ending tax breaks for farmers.
In other words, Tsipras is about to go back to parliament and attempt to pass a third set of prior actions that will further imperil Greeks' ability to spend, and he must do so quickly because if creditors aren't satisfied with the progress by August 18, then paying the ECB won't be possible and then it's either tap the remainder of the funds in the EFSM (which would require still more discussions with the UK and other decidedly unwilling non-euro states) or risk losing ELA which would trigger the complete collapse of not only the economy but the banking sector and then, in short order, the government.
And through it all, Tsipras is attempting to beat back a Syriza rebellion (which will only be exacerbated by the upcoming vote on the third set of measures) while convincing the opposition that he's not secretly backing the very same Syriza rebels in their attempts to forcibly take the country back to the drachma.
The only real question at this point is whether Greece can possibly navigate the next several months without descending into outright chaos, politically, economically, and socially.
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Looking for GoldMensch Sachs to own up to their part in this fucking fiasco...
Oxi! Opa! Ouzo! ;-)
Looney
Send John Kerry to calm the Greek citizenry.
Send a couple of German Infantry Divisions to calm the Greek citizenry.
Tsirapeuasskiss Is Still Around??? WOW Thats Surprising...
Are The Ordinary Greek Sheeple Asleep???
I have an idea the socialists in charge would agree with. They can just put a 50% property tax on any private Greek island owners that have a last name starting with B and ending in uffett.
Call in John Kerry? Oh, quit 'horsing' around.
This may be much closer to happening than many of us realize....and it's defintiely much closer to happening than what the "market" is "pricing in"....
Must pay those rich 1% bankers no matter what the cost to the bottom 99%. Fucking bastards!
Think of it as an "infestment" in the future.
Iceland showed everyone the first step....
What percentage of Wall Street executives, whose firms required taxpayer-funded bail-outs to survive, were fired over the Great Financial Crisis?
Tsipras needs to learn to spell "drachma" -and then print them
there's a lot of nonsense out there about how "bad" that would be for Greece. Couldn't be any worse than this-
The reason its going to be bad if they go the drachma route is because the rest of Europe will do everything to stand in the way of it working. Just to send a message to anyone else thinking about an exit.
I have a feeling that is what was said to them behind closed doors, and that is why they did the 180.
Total collapse: Going from miniscule to more miniscule. Nobody but the gubermint dole Greeks and a few shop owners frequented by gubermint doleites will notice. The rest of the world yawns.
But what about that BOOMING economy of Tanzania? Man if it collapses look out...
</s>
Economy? What economy? Empty promises made by the government drones, with the backing of the new elite, I feel sorry for the people, but they bought in on the bullshit and now music has ended and the piper demands payment......
zactly...
What they need are zero-down mortgages and 50 yrear car loans, etc. However, their biggest problem is inability to print, create out of thin air, their own money.
Here it comes, reality. Strap in.
Supply chains failing, income declining, tax base declining. Oh yeah!
Mother nature, the Goddess, shows us the truth.
Fuck the manipulators. Pontificate and strategize all you like. The truth comes home to roost.
Greece was paying it's drug bill with bonds two years ago. Pfizer and other companies told their business end to cash these out ASAP. Drug and medical device companies no longer sell current products into Greece unless it's a dire emergency.
This is the end of the road in a very big way. How much is Greece starting to resemble a 3rd world country?
Wrong, 4th world.I never had problems getting meds in 3rd world ones.
Scripts rarely needed either.
1st world refers to countries with central banks....the scale is skewed.
that said greeces ass is getting fucked.
RIPS
This is like watching Intervention when you know the subject ain't gonna make it.
pods
Some people just gotta hit bottom headfirst.
Gary Busey comes to mind.
I thought they voted against both collapse and austerity though. Why does reality hate democracy?
A poster from the 1970's explained that: "Eat Sh!t, 320 Billion flies can't be wrong!"
70% fall in retail sales? How much has the economy shrunk by? What happens to tax collections?
As for doctors, about half of Greek doctors never paid any taxes - so that is not such a big loss.
So doctors do more than pay (or not pay) taxes. You know, the whole "help sick/injured people" thing. Windex can't cure everything you know.
++ for BFGW reference !
The Euro-crats are close to completing their mission. Greece was a test pilot and is ready for "Stage 4" - where the IMF comes in with DSK, rapes the pouplation, then chops up everyone and sells their organs on the black market.
Its the only way to save the "economy"
The Euro-crats are close to completing their mission. Greece was a test pilot and is ready for "Stage 4" - where the IMF comes in with DSK, rapes the pouplation, then chops up everyone and sells their organs on the black market.
Its the only way to save the "economy"
"...are looking for jobs abroad and leaving the country."
Obamaville here we come!!!
Forward!!!
WINNING!!!
Obama wants to run for a third term. And why wouldn't he? His loving idolizer John Boehner willing gives everything Obama wants.
and to think - all the CITIZENS had to do was kill the bankers and the politicians that betrayed them...
i can not feel sorry for the Greek people though i would like to....
just sayin.
Down voted ya. Until it happens by example in the US, I cannot say anything against another country.
People dont act until the pain is personal and extreme.
Soon coming all over Europe, Japan, North America... Me thinks Muricans aren't gonna take it laying down like the greeks...
Only till iShit stops working, then watch out. Revolts and mass suicides.
The longer the wait, the harder the fight. Most are oblivious.
This brain drain will crush Greece unless it's stopped.
The situation is dire but there's an easy fix: a serious fence.
What Tsipras and the rest of the wanna-be communists in his party need to do is follow the lead of the real communists in the party. They need to exit the EU and proclaim a soviet-style communist revolution and nationalize everything, including what remains of the banks, the ship industry, farming, and all the rest, right down to the (empty) corner market.
Then build a fence around the entire country and use red guards to prevent anyone from leaving.
Problem fixed.
Im not so sure thats gonna work. Looks lie China, Russa, Vietnam....have all walked away from that path.
Off topic but amusing.
http://finance.yahoo.com/news/global-q2-gold-demand-weakest-080332024.html
no way out.
greece is the blow for the Titanic West. the chaos will come in due course
Nothing short of naked, violent revolution will end the EUSSR looting of Greek civilization.
It will be even worse if Greeks keep burring themselves in even more debt as troika wants it. The only solution is to default on all debts immediately. Crash European markets and threaten introduction of drachma backed by Russian and Chinese investments that would flock immediately after default. But time for that seems gone so only more misery without hope to come.
For answer why we are where with our with never ending Greek tragedy read:
https://contrarianopinion.wordpress.com/greek-odyssey-through-debt/
Greece is fucked.
The world is fucked
We are all fucked.
But not as fucked as him
https://www.youtube.com/watch?v=yTMXteZokXs
Which is why they need to stay in the EU, so all those docs can move elsewhere in Europe and work.
They run a good restaurant....and a Greek Breakfast Restaurant is good too....speed on the gril for those fried eggs and sausage..we need more of those....and by the way...Sales down 70%..that is just reported sales....you know the taxable amount....face it....they are not paying taxes anymore..and that is going to be very hard to change from here on out...very hard...
Feta Chesse Omlettes baby. Side of rye toast and homefries.
add spinach and tomatoes
Greece, a country in which medical care is free, but if yu want to get treated, bring money. Can the US be far behind?
Most US health care is actually not care to make one more healthy. It is a business used to scam people and make them pay for things they do not need at prices they cannot afford. At best it treats symptoms only and at worst it makes people more sick an unable to handle disease.
That being said, they can handle acute care fairly well, broken bones, cuts that need to be stitched ... but stay away from their needless needles.
Medical care is free, BYOD. (bring your own doctor), the rest have all left town.
the EU will pay to get rid of Greece once the productive people of Greece leave (I see no barriers to exit for the productive), the alternative will be a giant "stiff" and foreclosure on nobody but a bunch of parasite immigrants and African refugees.
This will trigger interesting Eu tax claims with different rates based on national origin.
Then what, mass ethnic cleansing, deporations and immigration enforcement by Greece's creditors, or is being a Greek asset holder a .tmp job?
What are Greece creditor refugee liabilities, will the EU backcharge the Greek creditors for the upkeep of their parasite herd or let 'em all starve or what? Will they go after Greeks in the EU that have no Greek assets?
I suspect the EU will give direct benefits to the Greek mob and backcharge the rest of the EU indefinitely rather than go after the Greek asset owners.
Maybe the Greeks should start making things again.
the ilegal immigrants from Africa make great knockoffs of everything...Louis Vitton bags for 10$..easy..they sell them on a rug outside on your street...
Like what? What did the Greeks used to make? How can they compete with Germany?
A country in death throes is very unpleasant to watch. There is no hope for Greece in the EU.
When, oh when, are the Greek people going to wake up to the fact that their pathetic desire to 'stay in the Euro' is killing them? It is unbelievable to me that a majority of them cannot seem to grasp that being in the EZ is destroying their economy, their country, and their dignity and pride.
Wake the fuck up, people - please.
This Is Greek Sheeple ain't near as good a script as This Is Sparta.
https://www.youtube.com/watch?v=4Prc1UfuokY
Iceland had capital controls and has come back nicely.
Iceland was in control of its own currency and defaulted on the banks' debts and did not accept anyone else dictating its economic and social policies.
The hard left have failed, the country is collapsing.
Golden Dawn come next.
Impossible debts helped get the Nazis into power in Germany and it took someone like Hitler to default back in 1933.
The far left are wishy washy intellectuals, the far right know how to play hard ball.
Germany was forgiven 50% of their WWII debt in 1953. Forgiven also by Greece, a country that suffered hard at the hands of the Germans in WWII. Germany's debt was partly forgiven cause the world had learned the lesson of WWI. Of course, a good deed never gets unpunished. So Germany does everything in its power to block restructuring of Greece's debt. If I were a cynical person then I would say that Germany is seeking revenge for losing WWII and wants to win WWII after all. I am not there yet but I am getting close to thinking this.
They are both on the far left of the political spectrum. Both are just different flavors of totalitarianism.
...but you are right in that Golden Dawn is the only real pro Greece party. Idiots piss and moan about nationalism, but there is nothing wrong with protecting ones nation. People certaintly would not allow complete strangers to move into their house, eat their food, molest their children and shit in the middle of their living room. Yet somehow they find the equivalent national policies acceptable.
Zimbabwe, whithout comment.
"Coming to a city near you!"
The Greek
Shortly to become an endangered species, to become extinct within a few years, absorbed into other country's immigration cesspool.
Killing Democracy by obliterating the Cradle of Democracy
Hmm. Was that the game plan all along?
>Killing Democracy by obliterating the Cradle of Democracy
Meh. Democracy is based on unjustifiable violence. In the future it will be looked upon just like genocide and slavery. I guess the good thing about democracy is that it doesn't kill as many people as socialism does.
See Hans-Hermann Hoppe: http://www.amazon.com/Democracy-The-God-That-Failed-Perspectives/dp/0765...
Don't worry!
Greece is in the European Union. There are no borders. If a Greek has a valuable profession, she can always go to work in another country.
If she has no good profession and just gets government checks, I don't know.
By the way, 110 million Americans get welfare checks, 150 million including Social Security recipients. What will they do if the same thing happens in America? Some will return to the home country, of course.
What I'd like to know is is there any gold and silver being used as an exchange medium on the streets of Greece while the velocity of money continues to slow? Would an ounce of gold be accepted in payment for my weeklong stay at one of the tourist hotels, or would I have to go to one of the local 'cash for gold' exchanges, if they exist, and convert to euros?
Geek doctors living in luxury properties with swimming pools were lying about their value to avoid taxes . Let them leave and see if they can claim to be poor anywhere else.
MD's fleeing? Probably best thing to happen to the Greek people's health. Now if pharma would leave too and people got back to living healthy and keeping the pharma poison out of their systems, this could become a great country.
Get corn syrup and "convenience food" out of their system and I will agree with you.
This should be a good example for all americans to hock themselves to the hilt for the day we come crashing down. No sense in leaving your home for another country with equity on the table.
Creditors don't care what happens as long as they get paid. They'll turn Greece into an abyss of death.
And borrowers dont care about tommorrow as long as they can spend it today?
Both are at fault.
Queue the underground economy, local and free black barter economies will send the banks packing. If they can't store their goats and chickens, who needs them anyway? The true value of their "service" will be "discovered" this way. The only way any country can reclaim its economic freedom is to STOP USING THEIR CURRENCY!
Believe it or not, Greece is on the bleeding edge of freedom if they can just reject the Euro and any centrally controlled fiat currency. Sadly, "normal bias" will probably keep then tethered to the invisible fiat leash of debt. And the same for everywhere their is a central bank.
I agree with you (lwb) and surprised you haven't gotten a 100+ votes. Having read tens of thousands of comments over several years this one's right up there dude!
Thanks man, I just wish I could follow my own advice!
Living the dream, you know? The one where EVERYTHING is bought/sold in fiats.
I guess it's good to have goals in life. I would buy/sell everything in small airplane bottles of liquor if I could. Or feta cheese.
Yes my friend i'm going to travel there soon to see things first hand and will provide you and other Z/H'rs with a first hand account.
Going to fill a suitcase with drugs etc, hand them out and see what else i/friends can maybe do ( what little that may be ).
I'm running out of countries to visit as i'm not prepared to support the western parasitic predatory capitals ( in particular, USSofA, Germany, Holland, Belgium, Finland, Poland ) or the vassals of.
That's awesome, bring lots of tylenol and motrin, or whatever is available! I'm sure it will come in handy. If it were me I guess I would try to bring whatever is easily "portable" through the border, and of value to regular people. "Over the counter" Drugs for certain, everybody needs 'em! Maybe first aid kits as well. I'm sure you could trade one of those for a meal at a decent restaurant.
Next Tsipras will ban bartering.
Tsipras bent over and bartered away his ass to Schaeuble.
and got the classic greek-style screwing that he bargained for.
What else did he expect in exchange?
Buy food and water.
This is pretty much what Germany and band of goons wanted isn't it?
So they can't exports goods there anymore?
Let 'em eat Euros
I don't think that is the full picture. The poisonous mix of VAT increases, capital controls and unpaid government liabilities has brought the economy almost to a standstill. The most important question is how long will the problems remain. The VAT increases are there to stay. The unpaid bills of the government will need to wait until the 3rd "rescue" package has been finally adopted. And the capital controls? They can not be lifted before the Greek banks have been recapitalized. The recapitalization requires either additional money outside of the contemplated bail-in or the bail-in or a combination of both. A bail-in can not be done prior to the finalization of the 3rd "rescue" package because the head of Tsipras might be choped off as soon as the bail-in is realized and the resulting political turmoil will raise questions about the ratification process for the "rescue". Thus the capital controls will remain in place until the economy has finally and completely collapsed. The additional capital requirements will augment the amount needed from the currently contemplated 85 billion to at least 135 billion.
Yeah, sure, the (taxable) retail sales are collapsing.
What we're seeing is the ejecting of the hypertrophic, parasitic goverment and financial apparatuses.
Of course retail is collapsing. Only a fool would use their currency now and pay the increased taxes. The natural reaction is suddenly a "free market" appears out of nowhere as people suddenly realize with some creativity they can barter into what they may need, if they can find it. The state calls this a "black market" because they don't control it. Racist?
Luckily euro group demanded VAT increase. I mean higher the VAT, higher the tax income. Right? :)
Sorry. Shouldn't make jokes about this but the situation is absurd.
Well, at least no more Fakelaki to get an operation. Now, no operation at all.
Germany is killing Europe, again. Third time in 100 plus 1 years.
Hope countries both near Greece and beyond are ready for the refugee stream.
EXIT.
100% DEFAULT.
SWEAR OFF FIAT AND DEBT.
These people are so monumentally insane, a new term is needed.
PS: Declare the area humans call "Greece" a "government free zone"... and watch what happens. In five years it would be the most prosperous place on planet earth. And the oligarchs would move away, because what's the point of operating where you have no special privileges over everyone else?
But the Fourth Reich will get its pound of flesh! Isn't that right, Reich Minister of Finance Schauble?
Karma
It was first Greeks, led by Alexander the Great Homo who attacked the human civilization, who claimed to be the divine (read evil) messenger. His army murdered, looted & raped.
Karma payback now.
Greece was first to attack east, Greece goes down first.
Who is next?
(Portugal, Spain, France & lastly British I guess, as per karma)
In what concerns Karma... there is PLENTY to go around, for everyone
I find it hard to see how Greece could be in any worse shape
by declaring the reality of their bankruptcy
and getting out of the Eurozone and the EU