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Greece: 11 Lost Years, and Counting

As we see Greece rejoicing the win of a party that says they should renegotiate Euro debt, let’s see how their economy has done.


(Data from ECB)

They’ve seen their GDP go down to levels last seen in Dec 2003, which is about 11 years ago now. The GDP may have finally seen a quarterly uptick in Sep 2014, but that’s little consolation after all the dramatic falling it has done.

It’s really no wonder that Greece seeks any way out, even if they defaulted on European Debt or moved away from the Euro. The consequences may be dire, but if they are required to continue with their austerity measures, it’s unlikely they get out of this mess anytime soon. It’s a little incongruent for the ECB to say it will use whatever it can, including buying toilet paper worthy assets, to pump money into the economy, but will refuse to allow the Greek government to do the same thing. This, as the Greeks see it, is a bailout of European banks (who get all the money the ECB is printing) but not of European economies.

11 lost years is not something we can even begin to understand. To you in India, imagine the salaries of 2003, the house prices of 2003 and then, the GDP about 1/4th of what it is today. That’s what our economy was back then.


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  • D.Rama says:

    Greece should show the middle finger to ECB and default on their debt. It should be obvious to anybody with a working knowledge of economics to understand that once any country joins a supra-national entity like “EURO Zone”, the country’s debt is no longer sovereign. If such debt was marketed and sold as sovereign, then it was fraud right there. Media are talking of their “exit” from Eurozone simply because there are alot of powerful people who UNDERWROTE those debts whose asses are now on the line if Greece defaults. Maybe these underwritings are structured such that an exit is not considered a default, hence all this clamour for Greece’s exit!! Greece is being threatened/forced to exit the Euro rather than default!!! Something akin to you being thrown out of your own house (a joint family obviously) because…well you ate more at the table than the food you brought home.

  • Adarsh says:

    Is this real or nominal GDP?

  • If one spends the money he did not earn, he has to pay a price (interest). When interest expense is more than earning, he cannot service debt. Borrowing and consuming (and not investing) is quickest route bankruptcy for an individual, or a family or a nation.

  • Pravin says:

    House prices from 2003? Why would not anyone take it? All GDP growth is not the same. GDP cannot distinguish between a malignant tumor type growth and good growth.Asset bubbles, dig ditching, govt waste and boondoggles all contribute to GDP growth.not everything causes prosperity

  • Krish says:

    Greece would have exited long back had it not been the currency issue. If it exits, no one would trust Greece currency and inflation would be so high that it would be keep printing to buy EUROs/$. Greece would become Zimbwambe of Europe.
    Until its economy gets fixed, Greece would not dare to come out of Euro.