greece lighting

Greek Political and Financial system is wading in mire

According to Reuters analysis of last month,, Greece’s radical liberal Syriza party  would beat the current centre-right coalition as polls show regarding this Sunday elections.

Greece’s political crisis is deepening. The vote in December to elect a new president did not go well for the current ruling government. Right-wing Prime Minister and “Troika” lackey Antonis Samaras saw his candidate, Stavros Dimas, fall short. With less than the two-thirds majority required by the Greek constitution to elect a president, the country is heading tomorrow, 25th January, to new elections.

End of December, nonetheless, opposition party Syriza’s lead of 3.4 %  was down from 5.3 % in a Rass survey in November. An alternate survey, by Macedonia University for Sunday’s Kathimerini daily paper, demonstrated Syriza’s lead shrunk to 6.5 lead % over the  7.5 % rate  in a study in November. Based on the Macedonia University poll, 51.5 percent of Greeks want the current parliament to elect a new head of state while 45 percent are in favor of early elections.The polls taken place during January confirmed Syriza’s lead.

Some analysts predict that the current political instability in Greece is going to drag the country back into a new tragedy of uncertainty, economic meltdown and a Grexit potentially as mentionned in the Telegraph.

Such an analysis just simplifies the complexity of the situation that the country is going through during the last four years. In contrast with what the incumbent Greek Prime Minister Samaras claimed recently — that the crisis in Greece is ending — the reality for the majority of the society not connected with the corrupt political and economic elites is much more painful than what is described in the private meetings taking place in the decision making centers in Brussels, Berlin and Washington DC.

In Greece, half of young people are unemployed and many others — some of them with prestigious educational background — are struggling to obtain a job opportunity with at least a minimum monthly salary of only about 400 euros. Thousands of Greek young professionals are turning their backs on their country, taking the risk to become immigrants in order to pursue the same opportunities that other Europeans in their age group have in their homelands.

Those who are well connected with the Greek political elites ensure prosperity for themselves and their families. The harsh reality is that in Greece  ordinary people have been affected much more than the rich. As a result the gap between privileged and non privileged members in the society is increasing more and more.

Current statistical factors of Greek Economy. :

Growth

The Greek economy has contracted an astonishing 27% after the onset of the crisis in 2007. This was the worst recession in the entire euro-area and rivalled the economic meltdown last seen in the US during the Great Depression.

Greece growth

Greece’s Debt

Anaemic growth means the country’s debt ratio is higher now than at the start of the crisis in 2009.

At 177% of GDP, Greece’s debt mountain is the largest in the euro-area and has forced it to undergo a program of swingeing, growth-curbing austerity.
Ballooning public debt is now leading to increasing calls for Brussels to either write-off the country’s debt or provide for some form of debt relief if Greece is to have any viable hope of remaining and prospering in the currency union.

greece debt

Europe’s North-South divide

Outside of Greece, rebalancing within the eurozone isn’t going anywhere fast.

Since the crisis, the onus has been on southern debtor nations such as Greece to ‘deleverage’, or reduce their debt burdens, while northern creditors should help ease this pain by running deficits.

But according to Standard and Poor’s, the gap between north and south is widening rather than closing. Spain, Italy, Greece, and Portugal will owe a combined €1.85 trillion to non-residents by the end of 2014, compared with €875 billion a decade earlier. Meanwhile the top-three creditor nations in the euro – Germany, Belgium and the Netherlands – will see their a net external asset position bumped up to €2.36 trillion this year, up from €343bn 10 years ago.

europe north south divide

Trade

trade greece

Exports are one way Greece has been told it can get itself out of trouble. But the country’s export-led recovery has yet to materialise.

Stuck in a monetary union that does not allow it to devalue its currency and help make its industries competitive, Greece has had to undergo a painful process of ‘internal devaluation’ instead, where it has reduced its labour costs through falling wages.

But export performance has continued to lag. The country’s trade balance has improved because Greeks are importing less, rather than selling more to the rest of the world.

Job destruction

Approaching 27pc of the population, Greece continues to have the highest jobless rate in the single currency area. Despite some progress on reducing unemployment, the number of Greeks in work remains nearly a quarter lower compared to mid-2008.

employement greece

  • Austerity Politics

Greece’s economic turmoil has led to the rise of a number of radical political elements in the country. Foremost among them is the leftist Syriza party led by Alexis Tsipras.

Syriza, who have pledged to increase the minimum wage by 50pc, provide free heating and electricity for the poorest and increase the size of the public sector, hold a five percentage poll lead in the country.poll greece.
Charts Sources: telegraph.co.uk, Reuters.com, huffingtonpost.com
This post was firstly published in December and now is updated with current data.

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