IMF Report on Greece Post author By Karl Whelan Post date May 12, 2010 Jim Hamilton at Econbrowser points towards this IMF Staff Report on Greece released a couple of days ago. The report is pretty honest about the scale of the challenge facing Greece under the plan if it is to avoid default. Categories In EMU, European economy Tags Greece 9 Comments on IMF Report on Greece ← The New UK Government and Northern Ireland Corporation Tax → Honohan: The Irish Banking System and the Irish State 9 replies on “IMF Report on Greece” I suspect that DOD will despair at this, but the task facing Ireland is worse, but at least we have low CT rates, and more competitive costs, except land of course. For a decade or so, Ireland will be worse off than Greece, but again starting from a higher position. I see Ireland doing better than Greece in absolute terms throughout, but comparatively worse for that decade. After that both countries will be fully Japonified as in having massive debts. As a gesture, the centre will then forgive most of the debts in return for complete obedience and assimilation. Resistance is futile …… http://www.safehaven.com/article/16765/a-typical-european-response-to-an-atypical-european-problem NB No mention of PIIGS or Ireland!!!! @Pat Donnelly – The IMF report correctly highlights that Greece is in for a prolonged period of low growth as they try to achieve fiscal balance and deflate the economy. On the face of it we seem to be in a similar position, but I disagree with you on “Ireland will be worse off than Greece” – Greek GDP per capita adjusted for PPP is 70% of Irigh GDP par capita, so we would have to fall an awful long way and Greece would have to maintain its GDP before we are worse off. I also disagree on “the task facing Ireland is worse” firstly their debt/GDP ratio is worse but more importantly, they are a closed economy with little potential to trade their way out of the crisis. Greek total trade divided by GDP amounts to 47% the figure for Ireland is 164%. Greece also has a tradedeficit of 13% of GDP. As has been pointed out on this website all countries can’t trade their way out of the crisis but some are more likely to achieve that than others – I can’t see Greece among those that will, but Ireland stands a decent chance. @ Edgar.Morgenroth: “… all countries can’t trade their way out of the crisis but some are more likely to achieve that than others – I can’t see Greece among those that will, but Ireland stands a decent chance.” Edgar, I am unable to challenge you on the last few words above. However, I need to know what products we make here that we can export and nett a surplus – a surplus which will be sufficient to make (tY – G) = 0, or better still +**. Aggregate incomes/wages are declining. Aggregate un-employment is increasing. Retail is declining. Commercial is declining. Property is decling (and has -50% to go!). Personal wealth has declined. I hear anecdotal evidence that savings and debt repayments are both increasing. All these aggregate out as a decrease in GDP, no matter what spin anyone wants to put on it. Less Tax take!!! That IS good??? As I said, I am confused. The math says were still headed down – the spinners say were ‘saved’. Would I be wise to bet on the Math? Thanks. B Peter Just saw something funny about Greeks cutting deficits (I think it was in the Guardian) – if at first they don’t succeed in cutting it then they must Troy, Troy and Troy again. 🙂 Edgar “but again starting from a higher position. I see Ireland doing better than Greece in absolute terms throughout” Please re-read what I wrote. I agree with your position. There is hope for Ireland. But things are going to be worse. And for some time, Ireland will be losing more than Greece, but remain wealthier. OK? Gottit? Don’t count on Canada! Australia is rejigging migration. http://paul.kedrosky.com/archives/2010/05/household_debt.html Interesting comment in todays IT (from Bloomberg): “French president Nicolas Sarkozy threatened to pull out of the euro unless German chancellor Angela Merkel agreed to back the European Union’s bailout plan at a meeting last weekend in Brussels, El Pais newspaper said, citing comments Spain’s premier Jose Luis Rodriguez Zapatero made at a meeting of socialist politicians.” Any truth in it? @Aidan McGrath – what’s that old saying? “Loose lips sink ships?” I expect Jose was feeling a bit narked after having had the Bundesleague players telling him for a couple of days what he had to do and then getting a phone call from Obama, underlining how much US banks were in for hard times if he didn’t get his finger out with the cuts. There was a brief mention of it in the Guardian – I’m sure if you trawl the web there will be more: http://www.guardian.co.uk/business/2010/may/14/nicolas-sarkozy-threatened-euro-withdrawal Empty threats I suspect. What’s possibly more worrying is the Germans were obviously prepared to let some of their EU ‘allies’ be left to hang out to dry – and as we all know, if wouldn’t have been just Greece if they had been left up the swanee last weekend. Relations between Sarkozy and Merkel do seem pretty cool at the moment. Comments are closed.