Greek Economy Implodes: Budget Revenues Tumble 7% In January On Expectation Of 9% Rise

Tyler Durden's picture

While hardly surprising to anyone who actually paid attention over the past two months to events in Greece (instead of just reacting to headlines) where among those on strike were the very tax collectors tasked with "fixing the problem", we now get a first glimpse of the sheer collapse in the Greek economy, which also confirms why Germany is now dying for Greece to pull its own Eurozone plug (predicated by a naive belief that Greece is firewalled as was discussed before. As a reminder Hank Paulson thought that Lehman, too, was firewalled on September 15, 2008). And what a collapse it is: according to just released data from Kathimerini, budget revenues lagged projections by €1 billion in the very first month of the year. "Revenues posted a 7 percent decline compared with January 2011, while the target that had been set in the budget provided for an 8.9 percent annual increase. Worse still, value-added tax receipts posted an 18.7 percent decrease last month from January 2011 as the economy continues to tread the path of recession: VAT receipts only amounted to 1.85 billion euros in January compared to 2.29 billion in the same month last year." This it the point where any referee would throw in the towel. But no: for Europe's bankers there apparently are still some leftover organs in the corpse worth harvesting. Unfortunately, at this point we fail to see how this setup ends with anything but civil war, as the April elections will merely once again reinstate the existing bloodsucking regime. We hope we are wrong.

Epic collapse:

The VAT revenue data represent a particular worrying sign regarding the depth of recession for 2012, while even more painful measures are expected to lead to a reduction in salaries and therefore a further drop in consumption. This is the vicious cycle that the government will have to tackle by way of additional fiscal measures this summer.


According to the current data, the 2012 budget will certainly have to be revised soon, given that the original estimate for a contraction of 2.8 percent is now raised to 3.5-4 percent of gross domestic product.


Finance Ministry officials attribute the slump in VAT receipt figures to the major cash flow problems that enterprises are facing. Some of the latter are choosing not to pay for their VAT in order to plug other holes caused by liquidity problems.


At the same time the crisis is seriously hurting the competitiveness of Greece’s economy, resulting in a considerable drop in entrepreneurship. Finance Ministry data showed that some 111,000 companies shut down in 2011, against just 75,000 new businesses being set up. In fact the majority of new start-ups are not actual enterprises but newly self-employed professionals.


This is attributed to the dramatic fall in market turnover and the insecurity that entrepreneurs feel, dissuading them from getting engaged in the local business field.

And this is the background against which the Troika wants Greece to cut another 150,000 people, and to cut minimum wage even more? Does nobody realize that at this point the entire Greek economy has frozen to a dead halt, and has joined only its utterly insolvent banking system in the dumpster?

How much longer will doctors fret around the patient before they finally have the decency to admit the patient has long since passed away?

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PicassoInActions's picture

and euro is still going up.....

i think they will delay few more times till bank will offload their bs and then and only then they will call a default.

Gene Parmesan's picture

Well, Greece is still only in a recession, right? From the article:

"as the economy continues to tread the path of recession"


Mr Lennon Hendrix's picture

It's a bullish recession, and yes, it's priced in.

JPM Hater001's picture

All together out Of banks leads to black market leads to lower taxes leads to more deficits leads to cash out of banks leads tO black market leads to...

This spiral is easily predictable... I mentioned the GREEKS make cheating on taxes a game long before this right?

ShankyS's picture

Maybe Corzine is working his magic over there now? 

candyman's picture

I'm really, really f'ing tired of this charade, it seems to be having no impact on the markets and is going nowhere. But I'm still holding out for this thing to crack.

trav7777's picture

Why do you care what the frakin markets do?

As to the OP, ZOMG, the Greeks cheated on their taxes even more.  That'll show those pesky Germans, hey, if you ask for money we will pay you EVEN LESS.

candyman's picture

There should be some fucking reward, one way or the other, for the countless hours I've spent following this drama. I admit, I'm a thrill seeker and want to see some kind of super nova blow up. I've always loved fireworks and rollercoasters. But, that's just me speaking.

HoofHearted's picture

Would somebody just turn the lights out as they leave? I'm done with this already.

economics1996's picture

"And this is the background against which the Troika wants Greece to cut another 150,000 people, and to cut minimum wage even more?"

Cutting government in a recession/depression is the correct response.

economics1996's picture

Letting wages drop to market clearing levels is the correct response.  

LetThemEatRand's picture

Except when there is no free market, like now.   We are controlled by oligarchs.  You are advocating their complete victory while you cheer them on.

Spirit Of Truth's picture

LOL! We have the deluded buffoonery of someone tragically indoctrinated in the false religion of neoclassical economics.

Market clearing wages....less government is best to counteract a recession?

Apparently you missed it when Alan Greenspan announced he had "found a flaw" in his mindless Ayn Rand fiction inspired ideological idiocy.

Note that it was World War II that pulled the West out of the Great Depression.  Why?  Because economies were effectively nationalized.

Is government and central-planning the answer to the instability and inequalities of the "irrational" market system? Mostly not. But what else can be expected when the system becomes hostage to superfluous debts created by the money masters.  Funny how those who profess to warn the world about the 'road to serfdom' have, in fact, been unwittingly paving the way there.



ffart's picture

Can you tell me why the U.S. economy didn't start to improve until the 50's when most of the New Deal policies were repealed?

smb12321's picture

Actually, the reasons the US exploded after WW2 are quite straight forward.  Factories already existed - they simply had to be retooled.  The US was not damaged physically as in Europe.  And our low-tax policies provided plenty of disposable income for all the goodies that began spouting after the war.

The Big Ching-aso's picture



Greek Economy Implodes

How in the hell can you tell?

johnu1978's picture

Umm, no it's not!

What needs to happen here is the Greek government needs default on its debt. Pray for it, I know I will!!!!!



sagerxx's picture

Your reward is knowledge, attitude & information. What you do with it is your reward.

Viva-- Sager

disabledvet's picture about an appropriately entertaining look as what's really going on:

TruthInSunshine's picture

I should clarify my comment above about "slaves."

Anyone who owes money is enslaved to some degree. The more they owe, the more they're enslaved. This is why fractional reserve banking depends on getting entities and individuals comfortable with the notion of borrowing fiat conjured from thin air, leveraged up many times, for the Ponzi to be able to be perpetuated.

Many are not slaves, because they haven't fallen into this trap, even if they're are small subset (but growing) % of the population.

I genuinely believe they'll crash equity markets soon. Not because they want to, but because they will have to, given that sovereign debt on an unprecedented scale has to be absorbed in the coming years, and it has to be 'risk off' to get the Japanification process underway.

For those that think it's 'tin foil' speak to talk about "they'll crash the markets," it only is if you honestly believe that the PPT, Fed and Treasury truly don't roll out programs and policies to boost equity indexes, and if that's the case, I think you're naive.

If they boost equity indexes via a plethora of actions, merely abstaining from those actions necessarily means equity indexes will fall.

Japan has had to keep domestic savers in their soverign bond markets out of necessity, and their main equity index fell 92% in real terms since 1989 as this process has played out.

We'll see a similar process in the U.S. and Europe, as more incremental buyers of sovereign bonds have to be found in order to finance deficits. Absent this, non-equity assets will skyrocket, and the price of commodities, and the resulting cost-push inflation will murder economies.

bbq on whitehouse lawn's picture

All you had to say was go read My side of the mountain by Jean Creighead George.

Its talks in plain english all you need to know about freedom.

Read in in the six grade and it still moves me to this day.

Maybe im getting old, starting to remenber the past more clearly then present days.

TruthInSunshine's picture

That wouldn't have been as cathartic, though.

Besides, The Creature From Jekyll Island is the gold standard in dissecting debt enslavement and mankind's increasing lack of self-sufficiency and dependence on Dear Leader.

It's also available on Amazon: The Creature from Jekyll Island

Where does money come from? Where does it go? Who makes it? The money magicians' secrets are unveiled. We get a close look at their mirrors and smoke machines, their pulleys, cogs, and wheels that create the grand illusion called money. A dry and boring subject? Just wait!


You'll be hooked in five minutes. Reads like a detective story - which it really is. But it's all true. This book is about the most blatant scam of all history. It's all here: the cause of wars, boom-bust cycles, inflation, depression, prosperity.

I Got Worms's picture

Cracking open that book 4 years ago was my red pill. Went headfirst down the rabbithole and have not looked back since.

TruthInSunshine's picture

The red pill is bitter, but once one adjusts, one has far better odds of being reborn as free & liberated, and that is truly priceless.

Don Diego's picture

I am going to order that book, through Amazon nonetheless even if that means some three-letter word agency will log my IP address as potential troublemaker. They can't put all of us in the Gulag, or maybe they can.

pods's picture

When you are done with TCFJI, get Eustace Mullins book too, Secrets of the Federal Reserve.  Names more names.  Equally if not more damning.


booboo's picture

Hot damn, and I thought I was the only guy that thinks of that book and wistfully dreams of escaping to the woods with my pet falcon......wait just a damn minute, I don't have a falcon.

JLee2027's picture

A slave only until you refuse to pay the debts and are willing to endure the consequences the Ponzi Kings will put to you.  That's why I ask, are the People of Greece refusing to pay taxes - thus crashing the system - because they have nothing left to lose.  Or is this due to the tax collectors strike?

Anyone who owes money is enslaved to some degree. 

smb12321's picture

Both.  Greece, like all the Med nations, has (or should I say had?) a large underground economy off the books.  Lots of  lots of "you build my roof and I'll give you fish" deals are/were common.  The whole thing is a maddening Catch 22 - Greece can't return to the idiotic spending rampage (and endless borrowing) and they can't save enough in austerity.  Get the drachma, devalue it and get back in the cheap tourist business again.

candyman's picture

I remember watching those tv shows growing up. I guess im giving my age away so Ill stop here, but funny clip for sure.

bank guy in Brussels's picture

As Tyler suggests, they think they have a Greek bankruptcy 'contained' ... like they thought they had Lehman contained.

The post-Lehman near meltdown of the US and global financial system about 84 hours after the Lehman bankruptcy, on 18 September 2008 ... from a classic ZeroHedge article, 'How The World Almost Came To An End At 2PM On September 18':

« On Thursday (Sept 18), at 11am the Federal Reserve noticed a tremendous draw-down of money market accounts in the U.S., to the tune of $550 billion was being drawn out in the matter of an hour or two. The Treasury opened up its window to help and pumped a $105 billion in the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks. They decided to close the operation, close down the money accounts and announce a guarantee of $250,000 per account so there wouldn't be further panic out there.

If they had not done that, their estimation is that by 2pm that afternoon, $5.5 trillion would have been drawn out of the money market system of the U.S., would have collapsed the entire economy of the U.S., and within 24 hours the world economy would have collapsed. It would have been the end of our economic system and our political system as we know it.

We are no better off today ... »

Ned Zeppelin's picture

That was the official story.  But I have never bought it.  If you were in a panic, the announcement of a $250K guarantee in the afternoon, would hardly stem a panic.  And the money was draining far too fast (if the story is to be believed) for it to have been a "panic" of ordinary folks.  It would have been an institutional panic, with amounts at risk far in excess of the guaranteed account.

I have always wish this story could be actually investigated by some incorruptible types who could report the facts.  It makes no sense to me, the amounts are too large and too fast, with hardly a peep afterwards, and yet it is stated as the event that almost brought the whole show to a stop. 

Something doesn't smell right in the story.

TruthInSunshine's picture

Bank guy in Brussels, I agree 100% with your statements.

Hubris amongst policy makers and legislators is running at all time highs, it would appear.

That those who will be most fatally wounded by such hubris are the only resource solvent enough to tap, as in productive, taxpaying members of society, is the scariest part of all.

They never learn from history and they can never seem to see the forest through the trees.

Jack Burton's picture

Ha! Ha!  Yes, priced in, it is always priced in! The market is forward looking and it's sees bullish growth coming our way on the oceans of printed money flowing from central banks.

Calmyourself's picture

You have obviously noted that the word "depression" has been removed from the lexicon of all major news media, print, tv etal..

Prepare NOW!  The time is coming where it will seem as sensible as auto or catastrophic health insurance..

EyeQ's picture

euro will keep going up as long as benny prints more money than the ecb. benny does NOT want a higher US dollar so he will simply outprint the Europeans.  Then eventually USA can be renamed Zimbabwe 2 abd EUro Zone becomes Zimbabwe 3, and so on.

Olympia's picture


...the barbarians, who forced beautiful Europe to get down Zeus’“back” and made her a prostitute ...the unworthy Europeans, who in 1945 “took Europe down” from “Mount Olympus” and in 2012 relinquished “enslaved” Europe to the Phoenician loan sharks.

Germans are proved to be the easy solution to breach Europe’s door. Whoever wishes to “set foot” on Europe and demolish it, the only thing he has to do is to “fool” the Germans. For a second time in less than fifty years, Europe’s idiots become the victims of foreigners and they serve their interests at the expense of Europe...



The German traitors of Europe along with the Phoenicians from Asia may have forced Europe to get down from the "back” of the Greek “bull”, but it remains to be seen how they shall pull it through with the “bull”.



Schmuck Raker's picture

Yes, yes, not enough hyperbole here.

Mr Lennon Hendrix's picture

I find it hard enough to believe America can get along; I have no idea how Europe thought it could maintain one fiscal union.

In America there are many different types of subcultures, yet still there is an understanding that binds us.  In Europe each State has a diffferent culture, and even inside of them there are cultures that feel independent.  There was no way the EURO would function as an exchange, and even though it is sad that they tried, it is more sad that the technocrats won't let their one currencie dreams fade into reality.

Go back to what worked Europe.  You are many cultures with diferent lives, you should not act like you can all have the same expectaions but live different ways.  The ways must justify the means, and they do not currently.  Get back Europe, get back to where you once belonged.

Conrad Murray's picture

The Confederation must fail so that the Republic can blossom. Oh, and pay no attention to the stovepipe-headed tyrants, riding the beasts robed in black, looking to rape that Republic into a Dictatorship.

itstippy's picture

A vast difference in economic means doesn't automatically make a shared currency impossible.

My wildly irresponsible and completely insolvent Brother-In-Law conducts his transactions in dollars.  I conduct my transactions in dollars.  Mitt Romney conducts his transactions in dollars.  We're worlds apart in means, but we use the same currency.  It works because people understand that accepting payment from us in dollars is fine, dollar for dollar.  But loaning us dollars carries very different risk.

Imbecile investors bought Greek bonds figuring they were safe because they're denominated in Euros?  How stupid is that?  My Brother-In-Law would love to meet these shrewd money-managers.

CompassionateFascist's picture

Worse, they took BM and her CDS's seriously.

Excursionist's picture

Mark-to-market hits aside, if the investors are holding to maturity then so far so good.  Principal and interest payments have been made on time.  I bow before any fixed income manager who bought <=1 yr. Greek bonds with a defensible view on why a default would occur after maturity.  Such a manager has made / will make a killing if they're right.

smb12321's picture

That's the point.  They did NOT buy them because they were considered safe.  They bought them because they thought the absurdly controlled CDS would serve as a counterweight or even as a huge moneymaker.  Leveraging your positions 100-1 sounded smart but did they ever stop and ask if the EU would ever actually allow these to kick in?  

You're right about disparate folks using a common currency.  In the US there in an implicit agreement that moneys willl flow in part from rich states to poor states but since we're all under one umbrella it's a zero sum gain.  The same cannot be said about the EU.


Calmyourself's picture

Thats a good one stippy.. How many billions have you loaned your idiot brother in law that you now wish me to pay you back having been no party to the transaction? Egregious debt if there ever was any..

smb12321's picture

What in the hell does this have to do with my post about the underground economy?  THe point is that the deals are NOT in billions (or trillions) but are outside taxable transactions.

Eally Ucked's picture

You're real disapointement to me. What you said is not only silly but also against even your profile. Your premise is that if Europe did the same as your Big Ben, who I know is not your hero from reading your previous posts, we would not have too much to discuss. Now just let us know are you with Ben or you have some other solutions?

At least present some ideas to solve the problem, in Europe and US, can you? Don't bitch all the time to get Green arrows!