Nikos Tsafos has a fantastic post at his Greek Default Watch blog entitled “Ten Surprising Facts about the Greek Economy”. I normally hate listicles, but this one’s very good. For instance: it’s bad enough that Greek GDP won’t go back to its 2008 peak for the best part of a decade. But it’s worse that the two big drivers of Greece’s economy — tourism and shipping — are down 28% and 27% respectively in real terms since 2000.
Other parts of the list are equally surprising. Did you know that Greece’s 2011 budget deficit is just 40% of the size of its official tax arrears? Or that Greece has only really gone on a massive borrowing binge twice? Once between 1980 and 1993, and then again between 2007 and today. I, for one, didn’t know that Greece has the lowest level of private-sector debt in the eurozone — only about 150% of GDP, compared to well over twice that in Portugal.
One endgame for Greece is a managed departure from both the euro and the EU, with the ECB coming up with a mechanism for protecting depositors in Greek banks — George Soros, for one, says that “the Greek problem has been sufficiently mishandled by the European authorities that this may well be the best solution”. But that day is still a long way off. There’s no appetite in the EU generally for such a move, and even less in Greece. After all, the costs associated with ejection would be enormous — on the EU side for the bank deposit guarantees, and on the Greek side from the loss of all the benefits that come with EU membership. Meanwhile, the benefits on both sides are more amorphous and unpredictable. Argentina suddenly started growing after it devalued; Greece might not.
For the time being, then, the best we — and Greece — can hope for is more plans along the lines of “maybe if we tie two rocks together, they’ll float”. That, and continued austerity and stagnation. Joining the euro was, in hindsight, a really bad idea for Greece. But it’s one which is very unlikely to be reversed any time soon.