Minggu, 26 Januari 2014


  1. The OECD's review of barriers to competition in Greece has now been published. Full report here.
  2. Latest Eurobarometer survey on the state of the Eurozone finds that the Irish and the Greeks are still supportive of the common currency (see pg 9), although other PIIGS are disillusioned. See also pp 49.  Killer graph on page 58, where the Portuguese, Greeks and Spaniards turn out to be the Europeans least convinced of their countries' need to reform.
  3. Still with the Eurobarometer folks, Greece has some of the longest traineeships in Europe.
  4. And 7% of Greeks own handguns, 19% of which for 'personal protection.'
  5. The 2013 Health Consumer Index ranks Greece 25th out of , down from 22nd in 2012. Read the full report here, with particular emphasis on pp. 14-15, where the researchers find Greece's reported reduction in health spending unreliable. 
  6. Speaking of public health, the findings of this decade-old survey of excess winter mortality in Europe clearly reflect the distinction between European core and periphery. Discuss.
  7. The OECD has released its economic survey of Greece for the coming year, anticipating much slower growth than the government's estimates. Please note that the OECD has so far predicted Greece's fiscal multiplier more accurately than the Commission or the IMF, although it's unclear why. 
  8. Still with the OECD, the results of the PISA 2012 survey, the latest in the definitive series of studies comparing educational outcomes across the world, are due this Wednesday, 3 Dec. Stay tuned here.
  9. PwC and the World Bank have released its 2014 Paying Taxes index report, looking into the administrative cost of paying business taxes around the world. Some Greek figures included.

Sabtu, 25 Januari 2014


Here we are, me and CNBC's Ross Westgate discussing ACCA's latest Global Economic Conditions Survey, of which I am the editor. It's good news, but with a twist. See the full survey report here.


PS If the video doesn't work, try here.

UPDATE: Also got some nice Bloomberg coverage here.

Selasa, 14 Januari 2014


Welcome, dear friends, to the 100th post on LOLGreece. We’ve come quite a way and I’m grateful for your support. As a token of my gratitude I'm not going to do very much but I do promise to tag all of these posts and maybe add some kind of cool tag graphic. Yay!

The big news this weekend were the latest figures from the Greek statistics agency, which reveal that the Greek economy stands on the brink of a death spiral, clocking in at -3.5% growth. Why anyone is surprised, I don’t know. I won’t even bother to say “I told you so” even though I kind of did, because it should have been obvious to anyone paying attention.

Now, for the facts. First, the 3.5% fall is a year-on-year statistic. GDP actually grew by -1.5% in Q2.

Annualise this and you get a much more dramatic number: -6.1%. Or if you’re feeling more generous, annualise the figures from Q1 and Q2 and we’re on track for -4.6% growth this year. Both of these figures are well in excess of the 4% GDP fall anticipated by the EU and the IMF. Which of the three “annual” figures is the more accurate depends on what you think of the momentum of the Greek economic cycle.

My guess from the data so far (see below) is that we’re not halfway there yet and therefore I’m holding out for the worst-case scenario of a -6% growth figure for 2010.

Where does this leave debt to GDP and the deficit? It’s not too hard to approximate. You can get the latest external debt stats here and can approximate the incremental nominal debt in Q2 2010 based on the Q2 2010 change in our budget shortfall, which can be found here.

The result is a lovely linear upward trend, which has brought our debt to GDP ratio to a wonderful 120%, up from 115% in 2009. We're still some way off the forecast 133.2%, but there's always hope.

The verdict is that we're still way behind. 


Ever wondered what the fastest growing category of consumption is in post-crisis Greece?

Well it's the same one as in pre-crisis Greece. Drugs. Reports of 'sisa' scything through the streets of Athens, booming HIV infection rates among injecting users and the setting up of Greece's first supervised consumption room back in November may have given observers the impression that drugs are confined to the fringes of Greek society.

The fact, however, is that the formal household sector is chasing highs too, and has been for years. Only in three out of the last eleven years have Greek households failed to clock up a double-digit increase in the use of 'narcotics' as defined here, with the total amount spent in 2011 equal to roughly EUR1.2bn (or EUR110 per person) in 2010 prices.

What you can see from the graph to the right, however, is that consumption growth was in freefall pre-crisis, and the trend has reversed since, despite (or possibly because of) falling incomes.

The figures, however, are confusing in several ways. For one, Greece appears to be better at collecting data on narcotics-related spending than any other country in the EU. You can see for yourselves - most countries are unable to publish figures, and those that do, publish unrealistically low figures anyway. Going by Eurostat's figures, Greece alone accounts for half of the EU's drugs consumption. Frankly, that is impossible.

On the flip side, Greece's own figures may be inaccurate too. 100 Euros' worth of drugs for every man, woman and child sounds a bit high, particularly so when one realises that regular drug users are in fact quite rare. In Greece, for instance, only about 15% of high school age boys and 7% of girls had ever used any illicit drugs in 2011 (data here). The figures are quite similar for adults, with recent users making up nearly half of all lifetime users (data here). So if, say, about 5% of the population (allowing for under-reporting) are responsible for 90% of the total spend, that means they would each spend about EUR2,000 per year on their habits. It's possible, but it's a big stretch - and in 2011 no less. Remember, these are people upstanding enough to sit through a household consumption questionnaire. A real problem user wouldn't be able to sit through that without a fix of something, I doubt I would either.

The consumption data of course come from Household Budget Surveys (HBS) run by national statistics agencies such as Greece's ELSTAT. Harmonisation and comparability are, unlike with some other datasets, not a huge priority, so it pays to look at the original questionnaire and methodology. In the case of Greece, you can check out the full documentation of the latest survey round (2011) here or a more complete version (with questionnaires) in Greek here. What really stands out to me is that none of the questionnaires actually include any explicit questions on the use of narcotics - which makes sense. But in that case, ELSTAT must literally be relying on respondents to volunteer information about their drug habits, and they must be much more willing to do so than their fellow Europeans.

Time to snoop around a little.



As veteran readers know, I am a big fan of Eurostat's EU-SILC survey, the source of all European poverty statistics, among other things. I'm always amazed at how poorly the figures are reported on, with the juiciest ones typically buried under the headline-grabbing 'living in poverty' and 'at risk of poverty' statistics.

I reviewed these figures a year ago, when the latest update dated back to 2011; you can see that analysis here. But now the 2012 figures are in and the results are staggering. Following last year's methodology, I have condensed them into three tables.

The first table refers to food poverty, defined here as the inability to afford meat, fish or pulses every other day. Full data here.

People (especially men) living on their own did best in this regard during 2012, but were the only type of household to report reduced rates of food poverty. Presumably, this reflects the trend for young people who previously lived alone to move back into the family home. Everyone who was still living on their own by 2012 is by definition likely to be better off. What is much more notable is the absolute explosion in food poverty among single parents, nearly half of whom were unable to feed properly. The rate doubled year-on-year in 2012 alone.  Overall, 17.5% of Greek households with dependent children weren't feeding properly, which is comparable with the rate in Italy and still below the rates seen in accession countries. But among single parents, only Bulgaria does worse than Greece, and that by a small margin.

The second table refers to an approximation of fuel poverty, namely the inability to keep one's house adequately warm. Full data here.

Whatever the dangerous wood-burning of the last years may suggest, fuel poverty didn't jump quite as fast as food poverty, but it did jump across all types of households. Worst-affected were households with more than two adults but no children - which I suspect means young adults staying with their parents.

24.3% of households with children are fuel-poor, a figure surpassed only in Cyprus and Bulgaria. The pattern is similar for other types of households, including the particularly hard-hit multi-adult households.

The third table refers to arrears - accumulating debts due to rent, loans, consumer credit or unpaid bills. Full data here.

Here the figures have been less volatile year on year, but 2012 was still the worst year on record, with 39% of households having arrears of one kind or another. Arrears increased across all household types, apart from single men, but single parents were worst hit, with 58% of them now in arrears. As a rule almost all types of households with dependent children accumulated disproportionate levels of arrears in 2012. 46.3% of all households with dependent children were in arrears, the highest figure in Europe and its periphery countries, bar none.

More data are also available on households' ability to deal with unexpected expenses (full data here) and their self-assessed ability to 'make ends meet' (full data here). The results on unexpected expenses are interesting because they demonstrate the trade-off presented by greater access to consumer credit. Greek households are better placed even now to deal with unexpected expenses than they were back in 2003, when Greece wasn't in the depths of a decade-long depression. However, this is mostly due to self-restraint (households with dependent children, which do not have the same level of discretion over their spending, are genuinely worse off in this respect than in 2003), and of course comes at the price of mounting arrears. Regarding inability to make ends meet, it's worth noting that 70.1% of single-parent households face this problem, more than double the 2008 figure.

The stickiness of Greek poverty

Whilst we're on the subject of poverty, though, Eurostat also published an even less media-friendly study into poverty, which looked at the extent to which it persists between generations - i.e. to what extent the children of poor people tend to be poor and those of the well-off tend to be well-off. You can check the figures for yourselves here, but to me what stands out is the following.

As of 2011, poverty and financial security were equally 'sticky.' 59.5% of those Greeks who were having trouble making ends meet in 2011 grew up in households that had similar problems. 60.4% of those Greeks who were not having trouble making ends meet in 2011 grew up in households that also hadn't had such problems. The level of 'stickiness' of poverty was quite high by European standards (59.5% v. 52.1% in the EU-15), but the level of 'stickiness' of prosperity was low (60.4% v. 70.8% in the EU-15). This suggests that, over the lifetime of the average citizen, and compared to its EU peers, Greece has been relatively good at keeping poor people poor but not at keeping comfortable people comfortable.

Looking at the other two quadrants, it's possible to benchmark the snakes and ladders of social mobility across Europe. The 'snakes' figure is the percentage of today's struggling people who came from comfortable backgrounds. At 40.5%, it's relatively low in Greece, compared to the 47.9% average in EU-15 countries. The 'ladders' figure is the percentage of today's comfortable people who came from struggling backgrounds. Greece's 39.6% compares favourably to the EU-15's 29.2%.

Presumably the desirable kind of mobility is for people to climb out of poverty and for poverty to become less 'sticky.' If so, a simple composite index of 'mobility' based on these figures would crown Denmark, Austria and Iceland the winners (I'm excluding Latvia where mass emigration has introduced a kind of 'survivor bias' in favour of mobility). Bulgaria, Romania and Belgium would find themselves trailing. Greece would be quite close to the top, actually. The reason? The period through which 'mobility' is examined is, by the very nature of the questions, very long - equal to the average person's lifetime. The median age in Greece was 42 in 2011, so we're essentially looking at 1969 to 2011.


  1. Remember when a map of Greek grassroots organisations was published to counter stereotypes of laziness and apathy? Well there is that, and then there are slightly harder figures from the World Giving Index showing the kindness of strangers is flagging in Greece, even when it comes to gestures that cost nothing.
  2. As promised, the OECD's PISA results for 2012 are out - PISA being the triannual international assessment of school systems around the world. Greece still lags behind the OECD average and our children are among the most stressed pupils in the developed world, but our performance in mathematics is apparently improving. Check out more detailed results at the end of this page.
  3. What a week for international assessments, eh? the latest Corruption Perceptions Index is also out and Greece ranks 80th, right beneath China
  4. The OECD publishes its latest review of sub-national fiscal consolidation. Greece shines once again as one of the least decentralised countries in the developed world, but with an endless appetite for sweeping debt under the local government rug.


  1. And the fastest-growing consumption category in Greece (latest figures 2011) is.... Narcotics. (Full definition of this COICOP code here)
  2. Athens Stock Exchange emerges as one of the best places one could have put their money in 2013. I'm going to throw up. 
  3. Eurostat publish their first-ever set of figures on money laundering in Europe - not actual money flows of course, but reports of suspicious transactions as well as resources devoted to the fight against money laundering. Note that Greece has provided almost no figures at all, despite a three-year delay in the publication, plus how woefully under-resourced our public administration is when it comes to detecting money laundering activity.
  4. The Commission publish their Product Market Review, focusing on firms' access to finance
  5. Coming soon to a busted bank near you: the European Parliament and Council have reached an agreement which paves the way for bail-ins around Europe.
  6. Looking forward to what the Greek commentariat will make of this ECJ ruling that obliges them to consider asylum bids from homosexual African immigrants facing persecution back home.
  7. Mind you, banning same-sex marriage may be a public health risk.
  8. Financial liberalisation in China marches on. Here's the Bank of England's latest note on what it might all mean.
  9. Argentina is one step away from mending bridges with the IMF, or going broke, or both.
  10. Ireland's bailout is officially over. Feast your eyes on an infographic we can't reproduce in Greece.


  1. Reporters without Borders have published their 2013 World Press Freedom Index report. Greece is in freefall, sandwiched between Kosovo and Togo at 84th place, down from 70th last year. Reporters without Borders' mini-site on Greece is dated, but interesting nonetheless.
  2. A new paper by IMF researchers measures different countries' efforts to bring in tax revenue. Greece ranked high by global standards in 2011 (higher than, say, Canada) but lower than most core EU countries. Once again, revenues in excess of 43% of GDP turn out to be impossible. Note the similarity in estimates of maximum revenue between the paper I review here (42.7%) and this paper (42.4%), even though the methodologies are completely different. 
  3. On that same topic, the OECD releases its latest figures on tax revenues in the OECD countries, noting Greece's 'progress' in increasing revenue.
  4. The World Bank's researchers continue to plug away at the issue of global income inequality with a new paper. This one finds that the change in global income distribution since the 80s is essentially a swap of income between Western middle classes and Asian middle-classes. Presumably if Africa should ever get its act together we'll have another round of this.The paper also finds that, after accounting for the rising incomes of the super-rich (which are largely missing from household surveys and must be extrapolated from power laws), global inequality has remained almost unchanged since the 80s.
  5. The IMF's researchers are doing a Naomi Klein tribute this week, first with a paper that links income inequality and financial instability, and then with a paper on the redistributive aspects of financial regulation.
  6. But the opposite is also true: a very good research piece has also come out this week revisiting the Reinhart & Rogoff debate with what I think is amazing rigour; the authors find what they call 'tentantive' evidence that debt slows down long-term growth, but also find that it's pointless to expect a single threshold to signal the onset of debt overhang across all countries, and that the relationship between debt and growth is non-linear across countries, though probably linear within countries.
  7. Still with the IMF - this new paper suggests that countries can usually only sustain massive public debt loads because if their reliance on 'real money investors': central banks (foreign and domestic) and domestic non-financials, presumably including households. 
  8. Somewhere in a parallel universe, the UK Office for National Statistics explains the rationale behind the reclassification of Network Rail as a Central Government Entity, and the head of the agency is not accused of treason by illiterate trolls. Sigh.

Sabtu, 11 Januari 2014

It's the New Year

It’s the New Year, and real estate lobbyists’ minds turn to making predictions for the year ahead. And journalists whose brains remain on holiday serve up this self-serving rubbish as news.


Let’s have a look at a couple of examples.

‘Renters say buy buy: mortgages cheaper than rent’ was the headline on yesterday’s mX, the freebie rag handed out to afternoon train commuters. Matt Sun was reporting on the prognostications of the Property Council’s Caryn Kakas and RPData. According to Karkas, ‘renters this year will find the cost of rent will match what it costs to purchase and many will start making that homeownership decision.’ What’s more, ‘this will probably be widespread, especially if you don’t see new rental stock in Sydney, where the vacancy rate is below 2 per cent.’

Let’s see. The latest Rent and Sales report from Housing NSW gives the median rent for Sydney as $380 per week. The median sale price: $425 000. Assuming the purchaser borrows 90 per cent of that price on a 30-year mortgage, at current interest rates they’ll pay $572 per week. If - and it's a fairly big if – as the article reports, official cash rates are reduced by 1.5 per cent, and if – even bigger if – the interest rate on the loan is reduced by the same, they’ll still pay $487 per week – more than $100 a week more than the current rent. A not-insignificant amount.

Of course, that’s comparing current rents with current purchase prices. How much do prices have to fall, or rents rise, for rents and repayments to equalise? A crash in that $425 000 median price to $283 000 would do the trick – that’s a fall of 33 per cent in a single year, and I don’t think the Property Council is looking forward to that. No, their line is that prices will be ‘flat’, which suggests that the median rent will have to rise by almost 30 per cent to match the cost of purchase. Yes, thirty per cent. Even the Real Estate Institute of NSW would blush at such a prediction.

Another example, this time from the Sydney Morning Herald. It’s ‘Time to buy – if job is safe’, said Jessica Irvine in a piece of ‘analysis’ in last Thursday’s Herald. The Tenants’ Union has encountered Irvine before, spruiking the Real Estate Institute's notorious '20 per cent rent hike' prediction. Here’s what she’s said this time:

You can almost hear the sound of cheap champagne corks popping. A generation of would-be first-home buyers are getting ready to escape the clutches of the rental market…. The rapidly deteriorating economic outlook is shifting the long-running debate about "rent versus buy" in favour of "buy".

Actually, Irvine does get a few things right, but does not follow through on these insights. For instance, she notes that property prices remain high relative to wages, and lending to landlords has decreased. In other words, prices have a long way to come down, and the smarter speculators know it – which hardly makes it an auspicious time to buy. She also, rightly, observes that recent rent increases have ‘stretched some renters to their limit.’ But the implications of this for prospective rent increases are left unexplored.

I’m not about to make my own predictions for property prices and rents in 2009, but I will suggest a couple of questions that readers might ask when they see stuff like this in the media. First, about predictions of steeply rising rents: where is that extra money going to come from – especially if unemployment rises, and wage claims are reduced, and so much of the rental market is already in housing stress? Second, about it being ‘time to buy’: this supposes that prices are not going to get any better – and by that, I mean lower. But again, where is the money going to come from to support price increases – or even maintain current, still hugely-inflated, prices? Can Australian households really take on even greater debts, and devote even greater shares of their incomes to paying interest?

Better put the champagne back in the fridge, and one’s brain back in one’s head.