Many argue that Greece is going through a great economic development period in relation to the economies of the other eurozone member countries, considering that the Greek economy has left behind its heavy pathologies and that normality has been restored to a large extent.
The data we cite are not encouraging and the new normality is, unfortunately, a fragile new reality due to the large “cracks” that the Greek economy’s growth model, which has been unchanged for decades, maintains.
The new Greek growth economic normality
- Greek public debt of 405 billion euros
We have referred to the fact that there is an apparent inability to reduce the Greek public debt in absolute numbers. It reached an all-time high of 406 billion (euros) and fell to 405 billion (euros). Obviously, we include intra-government borrowing with repos since they have reached 52 billion euros. Greece continues to have the worst Public debt-to-GDP ratio in the entire eurozone.
- The Greek stock market index at 1,500 units
The new normality allowed speculation and gave a handle to some – especially foreigners – to buy Greece on the cheap. The Greek stock market proves that Greece is speculative not strategically investable, remaining a speculation market, developing economies. The Greek stock market from 900 units to 1,500 units gave big profits but few enjoyed them.
In Greece no more than 60,000 out of a total of 10,000,000. We will remind you that the Greek banks were privatized with a loss for the Greek government of 42 billion euros and the Greek banks were sold with the aim of winning for foreign investors, not for the Greek government to mitigate the loss.
- 780,000 companies out of a total of 840,000 companies are not eligible for loans
When 2,000,000 Greeks cannot borrow because they are on the “Black List” of financial institutions and when 780,000 companies out of a total of 840,000 companies are not eligible for loans, this cannot be called normality but snail-economy.
- Deposits 190 billion (euros) and private deposits 144 billion (euros) – The shadow economy is 44 billion (euros)
When the current governing party of conservatives came to power in 2019, they received private deposits of about 139 to 140 billion (euros) and within 5 years they increased to 190 billion (euros), an increase of 50 billion euros. This is a significant increase, but a significant part of it should be attributed to the underground economy, which is estimated at 44 billion (euros). For Example, when a construction company undertakes the contract to do a project, it will also deposit the amounts needed for the construction of this project (the largest part of it until the disbursements from the EU begin). This action increases the amount of deposits. In other words, the Greek economy endures because of the underground economy that is maintained, otherwise there would be a social revolution.
- Standing bank loans
The proof that the economy is not investable can be seen from the behavior of the loans. An investable economy means that all forces of the country from businesses to households can participate in growth. Unfortunately, however, an indicator comes to shake the narrative.
Bank loans have been stagnant for 3 years at 117 billion euros. Banks say there is no demand for loans, this is half the truth, the other half is that 2,000,000 households are on the banks’ “blacklist” and 780,000 companies are ineligible for loans.
How normal is normality, or rather how abnormal is Greece’s new normality? It is obvious that with 405 billion euros of debt, NPEs that continue to concern society moving to an amount greater than 50 billion euros, accumulated liabilities to tax authorities and insurance funds of 148 billion euros, the new normality in the Greek economy is so toxic and weak that just isn’t normal.
