Tuesday, 21 May 2013

GREECE: Still searching for glimmers of hope in a hopeless situation.

drownwarmThe good news is, some people think the bad news is good news

“We may be drowning, but the water’s lovely and warm”
Greek Prime Minister Antonis Samaras is now so deluded on the subject of a Greek recovery, there is a kind of developing sangfroid humour in the media coverage of his descent into what is either madness or carefully choreographed, slow-motion can-kicking. In this sort of atmosphere, it is truly astonishing just how much awful news can look good as things go from bad to worse than even the biggest Job expected. Greece has reached the stage in May 2013 where even Job has no comfort to offer: but somehow, the EC and its allies in the Athens government can spot a Phoenix rising from the coldest cinder.

Good news, the recovery will begin in 2014, and by 2016 unemployment will be only 21%.
Good news, inflation has been conquered: the March official figures show that deflation has arrived.
Good news – in the same month taxes fell….by a shortfall in government income of 25%.
Good news, Samaras is attracting new investment….by selling the family silver to China.
Good news, the Alpha Bank is Greece’s safest, it only lost 12% in value last Friday.
Good news, Greece’s borrowing costs have fallen – because nobody noticed a 5.3% gdp contraction in Q1.
Good news, investors are betting that Greece is on-track for recovery….its gdp is now back where it was in 2005.
A combination of surreal spin, lazy analysts and market braindeath hyper-optimism is conspiring to make it look as if the Hellenic Republic is back from the brink. Well I’m sorry, the country’s fingers may be back up to the cliff-edge, but a large truck is about to drive right over them. 1.3 million Greeks are out of work, 400,000 families have no income, 300,000 workers haven’t been paid for months, and hundreds of
thousands more have work, but can’t make ends meet on the salaries they’re getting. If those numbers don’t sound that big, try to remember that the total population of Greece is only 11 million.
Later this year, the government must deliver a 2014 budget. The EC says it is on track for this year (I don’t see how it can be with tax income down by a quarter) but it will probably need to raise an additional 8 billion euros to achieve the for 2015. If the Troika sticks to its insane insistence on the Greek government implementing more austerity to fill the gap, the relatively stable political situation will, assuming my sources are right, go very badly downhill.
The thing about Greece is that the bollocks is so ubiquitous now, it’s more ducks in a barrel than deconstruction shooting it down. But what far too many Northern and Western Europeans don’t get is that – just as there is no such thing as a gradual panic in the markets – as the Soviet Union discovered, there is no such thing as a successful rebellion on one country. Once somebody in ClubMed – and my money’s still on Italy – holds up their hands and says “Go forth and multiply” to the Troika, the fire-wave will travel faster than that following a large nuclear detonation. 

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