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Greek Economy Implodes: Budget Revenues Tumble 7% In January On Expectation Of 9% Rise
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.
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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AIDs is not in itself a disease, but a label applied upon other diseases in the presense of HIV.
Thus AIDs is more of a PR invention than something you might grow in a testtube.
Absolutely correct.
Why is the National Bank of Greece up 140% in two weeks??? Are they loaded with CDS and hoping for a default or is their a line item in the $200 billion bailout for bank stuffing???
And why is the National Bank of Ireland up nearly the same amount over the same time period???
Let me think about this....if you were a responsible working Greek citizen that had a nest egg what would you be doing with your money??
I don't know about you but I would be and would have already been getting it the fuck out of Dodge.
lady angela's freudian slip was but a posted hypnotic reverse psychologist [un]known anomaly - sometimes referred in the field of behavioral science, as "Verified Osmosis Refraction Sub-Anatomical Behavioral Phenomenology"
kiss - pre-programmed ___ eg. Manchurian Candidate
"How much longer will doctors fret around the patient before they finally have the decency to admit the patient has long since passed away?"
When there is no hope of collecting...
Hank Paulson thought that Lehman, too, was firewalled on September 15, 2008)
Yes but Paulson made a very American mistake and forgot there was a big wide world outside his office......since most of Lehman's trades were handled through LONDON it was not US Bankruptcy Law that was relevant but ENGLISH Bankruptcy Law. Cleaning the cash out of London operations on a Friday to window-dress in the USA left the UK entity trading whilst insolvent.
It would be lovely if these "Masters of the Universe" like Paulson actually understood the operational aspects of these businesses paying them so much money.
That asshat can choke on a bag of dicks too.
Bloody turnips...it's what's for dinner.
It looks like all this ECB "printing" is causing massive hyperinflation in Greece. It is a good thing I bought a shit load of gold and silver.
And The Wurlitzer Plays on ....
Kinda off topic, but the uber bulls like Fink are going all in on central bank print overkill.
http://www.bloomberg.com/news/2012-02-08/blackrock-s-fink-says-investors...
a c*** like him would kill you in the market. No problems. Suck you dry.
I see a noose in that MOFO's future...
A 9% percent rise?? LOL. How many ouzos did it take to come up with that.
The Greek civil war may be a glimpse of things to come in the US - a war between the government employees, who want to keep their cushy jobs with generous pay and benes, and everyone else who actually has to be productive for a living, fighting to wrest their country back from the hands of parasites.
Kyle Bass participated at the Brentwood gathering right
how can I see the video for free?
come on ZH should sponsor this shit
But... the IMF said Anorexia would make them sexier!
Default already, I don't appreciate all the dramatic pauses.