Greece Slides Back Into Recession Amid Riots, Rewewed "Grexit" Calls

Tyler Durden's picture

It was just over a year ago that Greece elected Alexis Tsipras and Syriza amid a flurry of anti-austerity sentiment.

Things didn’t exactly go as planned.

The new PM and his “radical” finance minister Yanis Varoufakis thought they could shake things up in Brussels and wrench Greece from the clutches of Berlin-style fiscal rectitude. As it turns out, Wolfgang Schaeuble is not a man who is easily bested at the bargaining table and after more than six months of negotiations, the imposition of capital controls, a referendum on the euro that Tsipras promptly sold down the river, Greeks ended up facing an outright depression.

In the end, Varoufakis unceremoniously resigned and Tsipras agreed to a third bailout before calling for snap elections that would ultimately see the PM re-elected albeit at the helm of a party that was completely gutted by the arduous bailout talks.

As we and quite a few others warned, the new bailout and the attached terms would do exactly nothing to turn the Greek economy around. We’re all for being responsible with the budget but you can’t very well implement fiscal retrenchment during a depression unless you intend to remain in said depression in perpetuity, but alas, that’s exactly what Brussels forced Greece to do and on Friday we learn that the country has slipped back into recession.

GDP contracted 0.6% in Q4 after shrinking 1.4% in Q3. “With opposition mounting to the government’s pension reform plan, the European Union pressuring it to stem the tide of refugees entering the country and the global market rout hastening the sell-off in Greek assets, dark clouds are gathering again,” Bloomberg writes. Ironically, capital controls appear to have helped the economy perform better than expected: “The economy fared less badly than those initial expectations in part due to a 90 percent annualized increase in cashless payments since the introduction of capital controls in June, shifting activity out of the shadow economy.” Another justification for banning cash we suppose.

Earlier this month we noted that Greek bank stocks were cut in half in just a matter of 72 hours while Greek equities as a whole had fallen to their lowest levels since 1989. Yields on the Greek 10Y had spiked back above 10%.

Greece, sources told MNI, "seems unable to deliver" on a number of measures Brussels says Athens needs to implement an effective fiscal consolidation plan. "We agreed to disagree," one official said. "Judging from (last week's) talks, the negotiations could drag for months. Anyway, I don't see any real funding needs for Greece until June," the official went on to note.

Maybe not, but things are getting dicey again. Tsipras faced the largest public revolt he's seen since his re-election earlier this month when a massive general strike that cancelled flights, ferries and public transport, shut down schools, courts and pharmacies, and left public hospitals with emergency staff. Even the undertakers were striking.

Tens of thousands took to the streets to protest pension reforms and in relatively short order, it was 2015 all over again. 

And it didn't stop there. "Greek riot police fired tear gas at farmers protesting against pension reform plans on Friday who hurled stones at the agriculture ministry in central Athens ahead of a major demonstration outside parliament scheduled for later in the day," Reuters reported on Friday. "Under the planned reform of the pension system demanded by Greece's international lenders, farmers face a tripling of their social security contributions and higher income tax." Here are some images from the scene: 

So no, Greece is not "fixed." And even as the farmers swear "they won't make us bend," something will have to give because as Poul Thomsen, head of the International Monetary Fund’s European Department wrote in a blog post on Thursday, "Grexit fears to resurface once again [if all sides adopt] a plan built on over-optimistic assumptions."

In other words: the reforms are a must if Greece wants to remain in the euro and those reforms entail tough times ahead for the farmers and for everyone else living in the socialist paradise. 

Throw in a couple of hundred thousand refugees that are lliterally arriving in boats and you've got a particularly precarious situation that will likely devolve into the type of chaos shown above on an increasingly frequent basis.

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ShortTheUS's picture

Oppression and depression go hand in hand.

VinceFostersGhost's picture



Again with Greece?


I thought we fixed that crap!


Bernie Sanders should use that in his campaign......socialism rocks.

Haus-Targaryen's picture

Fuck the Greeks.  Selber Schuld.  Either leave the EUR, or STFU. 

NoDebt's picture

Cyprus exited it's 3-year "program" with the EU/ECB today.  Hard to believe it's been 3 years since the infamous program that included taking all depositor's money in the biggest Cypriot banks.

See?  The "program" works!  Or so the MSM will say today if they mention it at all.

Of course, as they exit the "program" NPLs inside those self-same banks are still running... and I'm not making this number up... over 46%.  And, of course, the economy is still flat on it's back at a much reduced level from before the collapse.

They'll be back.  Oh, yes, they will definitely be back.

Money Counterfeiter's picture
Money Counterfeiter (not verified) NoDebt Feb 12, 2016 7:47 AM

To the economic illiterates at ZH-Reuters.  The way to fight a recession is simple.

1.  Liquidate insolvent companies.

2.  Cut government spending, the more the better.

3. Contracted credit, raise interest rates at least 3% above inflation..

3.  Allow adults to pick up the pieces and move forward preferable without lazy bureaucrats on their backs. 

BeaverFever's picture

The images of the angry farmers are disturbing. Can you imagine the shock of the Greek people when they have to pay $8 for a frickin cucumber like we Canadians do?

We're taliking about a revolution in the making...

Joe A's picture

That's right. If the farmers would stop supplying the market with food you'd get rising food prices and more riots on your hands. But the farmers would lose the popular support.

Troy Ounce's picture






Like clog dancing, jodel music, coma drinking or school shootings (country dependent)

Dental Floss Tycoon's picture

Somewhat country dependent but spreading none the less.

The rubblization of the Middle East is spreading to Europe.

Rubblization is the ultimate outcome of failed economies so someday coming to a city near you.


carlnpa's picture

Farmers make exactly Jackshit on their sales.

It all goes to the middleman somewhere.

The pittance farmers make would shock the populace.

Dental Floss Tycoon's picture

In the great 1930's depression the farmers in my family had very little but they were not hungry.  The city dwellers were a different story they were poor AND hungry.

Learn to grow stuff.  Your life and your progeny may depend on it.

andreyy82's picture

Wait... it is the program of Weimar Republic after the 29 crisis?we sa e the results... the only way for Greece to return to the development is to leave the Euro Nazi Reich and default

FreedomGuy's picture

@M Counterfeiter as a very real counterpoint.

To the economic illiterates here at ZH-Reuters: The government-centered way to fight recession is simple.

1. Subsidize insolvent companies if they provide votes and/or good poll numbers. (Politics)
2. Increase government spending, the more the better, as stimulus and ensuring loyal governmental employee union votes and campaign funds. (Keynes-politics)
3. Expand credit to NIRP, if necessary. (Fed-Keynes)
4. Keep the population infantile and dependent so they cannot even imagine a world without governmental elites.

Joe A's picture

I agree, they should have left the EUR back in 2011. They would have defaulted. It would have been hard but eventually they would have recovered. Now they still need to pay back all that money while at the same time austere and put in reform (which they also need) but the German (and other countries') banks that got an EU tax payer funded bailout out of bad investments they did in Greece. Taxpayers bailing out private banks is rogue capitalism, after all they don't share their profits with the taxpayers. Greece was a testcase and slaughtered at the altar of rogue capitalism. Tsipras was too chicken shit to go all the way. Or he is an agent.

Motasaurus's picture

It seems more likely that he was red-roomed. 

Wined, dined, drugged and given little boys and/or girls to have his way with, all while the cameras behind that "glory mirror" filmed him doing it.
CIA (and its predecessor) has been "buying" off European politicians, media personalities and corporate executives in that fashion since at least the end of WW2.  

Tsipras went to Brussels having just been told by the Greek people to give the EU the finger and tell them just how far up their arseholes they can shove their "bailout" plan. Two nights in a hotel and a meeting with the EU later and he comes back having bought into the EU harder than a pedophile in an orphanage. 

CarpetShag's picture

- they won't be allowed to leave the EUR because that is the currency their debt is denominated in
- they won't leave the EU because of the bribes their politicians get from Brussels, and they would lose their complement of tax-free salaried bureaucrat sinecures

Ghordius's picture

I'll reply with - 70% of Greeks still want to keep the EUR (including the banknotes under their beds, next to their gold). oh, damn, isn't this little pesky fact such a bother for your argumentation? but relax, facts don't matter in the blogosphere /bob

CarpetShag's picture

Your comment in no fashion invalidates mine.

MS7's picture

Propaganda from mainstream media about years of starvation following exit from euro works well on the aging population of Greece which has a low rate of internet usage.

MS7's picture

They won't let them leave the euro but wll keep likely them chained with one foot in the euro and the other to natinoal currency-- the worst of both worlds. They will probably give them the parallel currency option so the Greek money will be less than worthless and meanwhile they will have to pay back the debt in euros.

firefightergr's picture

If you let us go, we go yesterday.

Europenises are bad company.

Fod's picture

Nice one, but non-Greeks won't understand it :)

NoDebt's picture

Wall it off and put all the rapefugees in there with them.  One giant garbage dump to save Northern Europe.

WOAR's picture

Now showing in theatres everywhere:

"Escape from Greece"

Starring Kurt Russell...

Somewhat Evolved Monkey's picture
Somewhat Evolved Monkey (not verified) VinceFostersGhost Feb 12, 2016 8:52 AM

Judging by the above pictures, the Greek people are "Feeling the Burn." Or is it Bern. I get confused.



Bank_sters's picture

If I were a greek, I'd cheerfully meet the refugees on the beach with a map to Brussels and Berlin.   Shit, if the greek govt had half a brain they'd buy them train tickets.

jerry_theking_lawler's picture

New clothing line....Adidas 'Riot Gear' the gear of Greek champions (approved by riot dog,rip).

open-range's picture
open-range (not verified) ShortTheUS Feb 12, 2016 9:40 AM

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do...

Last of the Middle Class's picture

Greece is still a country?  Whoda thunkit?

Id fight Gandhi's picture

Yet another major headline story for weeks last year that suddenly disappeared from the media. More proof the media is strictly controlled.



Ghordius's picture

+1 Id fight Gandhi. what happened while Greece disappeared from "the media"? I offer this: all four major Greek banks, representing the most critical part of the Greek banking system, underwent... restructuring. interesting, eh? now, of course, how to prove that the two things are... connected? so it's only a speculative thought  /stuart

JustObserving's picture

Recession and riots will spread to the rest of the EU as they find out that their debts are unpayable too.  Spain, Portugal, Italy, Ireland are on the cusp of being the new Greece. The rest of the EU will follow.

FinMin's picture

Target cuts only against nonessential personnel and let the chips fall where they may. The socialist fiction that every expense must be maintained because it is demanded must end.

PeeramidIdeologies's picture

There is nothing that can be done to improve this situation within the established economic parameters. Any action taken will provide a net-negative effect. The machine has simply become too effective.

The only way out is for people to understand the actual INVESTING that must be done upfront to create a new economic paradigm. Of course you would need a PHD to figure out how to do that.

Bangin7GramRocks's picture

They really are struggling with their new reality. Greece is Jamaica. Poor as fuck where the only jobs are smiling and serving white people at the seaside resorts.

No Half Measure's picture

Ya but they don't got no Red Stripe mon.

snr-moment's picture

so I should stop going to Jamaica?

Bangin7GramRocks's picture

Hell no! But I wouldn't go to Greece until those uppity Greeks learn their place. They need weed and lots of it.

peddling-fiction's picture

Great grandfather of Western Civilization was it? Our grand father was Rome.

How low a country can fall...

MadVladtheconquerer's picture
MadVladtheconquerer (not verified) peddling-fiction Feb 12, 2016 9:56 AM

That and 3.75$ will get you a cup of coffee at Starbuck's.

Either innovate, immigrate or evaporate.

indygo55's picture

They boil up a few riots and protests every few months to let us know that there is still strife in that part of the world. Honestly, after this summers epic fold like a cheap lawn chair, does anyone really give a shit about Greece?

Ghordius's picture

"...something will have to give because as Poul Thomsen, head of the International Monetary Fund’s European Department wrote in a blog post on Thursday, "Grexit fears to resurface once again [if all sides adopt] a plan built on over-optimistic assumptions." "

and that's the "because"? ho hum /bob

CarpetShag's picture

Your comments are either sophisms or avuncular.

Ghordius's picture

I'll go for the avuncular. bit fan of it, actually, so thank you for the compliment /bob

MadVladtheconquerer's picture
MadVladtheconquerer (not verified) CarpetShag Feb 12, 2016 9:58 AM

I'll go w/ AVUNCULAR for 1000$, Alex.

GhostOfDiogenes's picture
GhostOfDiogenes (not verified) Feb 12, 2016 7:22 AM

"Under the planned reform of the pension system demanded by Greece's international lenders, farmers face a tripling of their social security contributions and higher income tax."

International jew bankers who create nothing but debt in a nutshell:

youngman's picture

Cool..Greece is back in the many loans does DB have from Greece???   probably quite a

Panic Mode's picture

Grexit, Spaxit, Itaxit, Portxit, for fuckxit

ToSoft4Truth's picture

The Citizens still don't get it - Greece is out checks.  So funny.  Like the US SS and EBT crowds....