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Friday, February 24, 2017

Bad News On The Current Account

Below are Greece's current account statistics for 2016, compared with the previous year. It should be noted that the source of these statistics is the Bank of Greece. ELSTAT has not published its statistics yet and their numbers are always a bit different from those of the Bank of Greece.

(in BEUR)

Current Account
2016
2015
Revenue from abroad
Exports 24,5 24,8
Services (e. g. tourism) 25,0 27,9
Other income 6,7 7,5
Current transfers 1,8 1,9
------
------
Total revenue from abroad 58,0 62,1
Expenses abroad
Imports 41,1 42,0
Services (e. g. tourism) 9,7 11,0
Other expense (e. g. interest) 5,9 6,5
Current transfers 2,4 2,4
------
------
Total expenses abroad 59,1 61,9
Net foreign deficit (current account) -1,1 0,2



Trade balance -16,6 -17,2
Services balance 15,3 16,9
Other balance 0,8 1,0
Current transfer balance -0,6 -0,5
------
------
Net foreign deficit (current account) -1,1 0,2


2016
2015
Exports "Other Goods" 18,2 17,9
Imports "Other Goods" 31,8 30,5
------
------
Balance of goods excluding oil and ships -13,6 -12,6


By and large, there was deterioration across the board. The overall balance was a positive 206 MEUR in 2015 and a negative 1,1 BEUR in 2016. A deterioration of 1,3 BEUR is quite significant!

The balance in services declined from 16,9 BEUR to 15,3 BEUR and, ideally, this would have been offset by a reduction in the deficit from trade. That trade balance was indeed reduced from a negative 16,9 BEUR to a negative 15,3 BEUR but that was not enough. When only looking at "other goods" (i. e. excluding oil and ships), which is really the key figure for Greece's foreign trade, there is a significant deterioration.

What does a deficit in the current account mean?

First of all, it means that the country had to import capital in the amount of the current account deficit, i. e. 1,1 BEUR. Put differently: someone within Greece (the state, the banks of someone else) had to import capital to the tune of 1,1 BEUR (net). Since hardly anyone makes voluntary loans to Greece these days and since there was no significant foreign direct investment (in fact, net FDI declined!), it must have been the Troika which put more money into Greece than it took out by way of principal and interest payments.

When revenues from abroad fall short of expenses abroad, there has to be new borrowing from abroad (in the absence of FDI). Greece could raise the necessary funding abroad to finance the shortfall in the current account thanks to being a member of the Eurozone. Otherwise, Greece would have had to cut foreign expenses (such as imports) by 1,1 BEUR.

Another way of looking at the current account deficit is this: a current account deficit is nothing other than the transfer of domestic wealth into foreign ownership. During 2016, 1,1 BEUR of domestic Greek assets were transferred into foreign ownership.

73 comments:

  1. For outside imposed austerity these are fine numbers. What do you find wrong with them?

    ReplyDelete
    Replies
    1. The weakness in Greece's external accounts is that there simply has not been any significant growth in exports, despite the fact that Greece has become much cheaper since 2010 (austerity) and despite that fact that the Euro has declined from almost 1,60 at the outset of the crisis to about 1,05 now. Under such circumstances, one would expect Greek exports to 'explode' (as they have grown rapidly in Portugal, Spain, etc.). In actual fact, exports of 'other goods' (excluding oil and shipping) were 17 BEUR at the peak before the crisis and in 2016 they were 18 BEUR. Even a blind man could judge that this smells very much like complete failure of the Greek economy.

      Delete
  2. Tourism took a hit but next year is going to be a boom year.

    ReplyDelete
    Replies
    1. Tourism depends on German tourist spending which continues to go down per head per stay and it's now close to 500 euros per stay because to put it bluntly Germans are very cheap people and they would sell their mother to get a deal.

      As for 2017 more Germans are coming and the totals tourist number will go up again but after all dealing and servicing Germans (notorious freeloaders) you know what this means: even less money for Greece despite the record arrivals.

      Delete
  3. Klaus:

    How could you possiby have a significant growth in exports when 40% of Greek exports are petroleum products and oil in general experiencing one of the lowest years on record for crude oil prices? During 2016 the average crude oil price was in the $30-$40 range per barrel. Do you want to rethink your argument about Greek exports? Because excluding petroleum products actually Greek exports grew in all other categories. Exports to the EU grew, despite the EU and the eurozone being at a miserable economic state.

    ReplyDelete
  4. Klaus:

    You constantly surprise me what a mess you make with the BOG numbers and I have to tell you that you are beginning to solidy in me the belief that bankers and ex-bankers are basically a useless tribe especially when they read their own numbers and begin to whine without ending as you do.

    We have been though this before and I have told you that the only reliable numbers are the official Greek exporter numbers which we only have for the 11 month period in 2016 and which reveal the following:

    Greek exports are comprised of five main categories:

    1. Agricultural exports which represent 22.6% of total exports and which during 2016 grew by 9.3%.

    2. Raw material exports which represent 3.9% of total exports and which srunk by 1%(0.9%) during 2016.

    3. Fuel and petroleum exports which represent 27.1% ( 30.1% during 2015) of the total exports and which shrunk by a huge 12%.

    4. Industrial exports which represent 44.2% of total 2016 exports and which grew by 0.3% during 2016.

    5. Finally we have a miscellaneous export category which represents 2.2% of total exports and during 2016 it shrunk by 11.7%.


    Therefore the lack of performance in Greek exports you so desperately are trying to make is all in the fuels and petroleum category. Because Greece in order to produce petroleam products and fuels for exports, first it needs to import crude oil and as such the import numbers on fuels is more of the telling story:

    Fuel/crude oil imports represented 22% of all total Greek imports and they shrunk by a stagerring 17% during 2016 (I am sure some of it attributed to the lower price of crude but also another more significant part attributed to the fact that petroleum product export markets diminished for Greece during 2016 mainly because its main customer Turkey finally got its act together and introduced a series of brand new refineries in Turkey thus eliminating the need to import from Greece for their fuel needs).

    Please have the elementary patience to wait for the final numbers - including December - from the Greek exporters association and then we can draw any meaningful conclusions.

    According to my reading Greece continues to grow its agricultural exports (which everybody says that it must do, therefore an almost 10% increase is not something that will make anyone dissapointed). Finally Greece maintains a constant basis for its industrial exports (which happens to represent the great majority of Greek exports) so 2016 was not a bad performance year. The petroleum/fuels business is as we have spoken before some sort of arbitrage business and the significant factor in said business is when and at what price you buy the crude oil needed to perform its transformation to higher grade products and then at what price you sell the fuel export products and how fast.

    To understand this finer point consider this example. Say you have bought crude towards the end of 2015 (paying 2015 prices) and then you sell petroleum its derivatives you produced during 2016 when the oil prices have tanked. Obviously you would suffer a serious loss doing so.

    The only numbers that count for Greek exports are the ones excluding petroleum products. Petroleum products is a game played by 3-4 players in Greece and has minimal effect in the Greek economy (meaning jobs and gainful employment).

    ReplyDelete
    Replies
    1. "The only numbers that count for Greek exports are the ones excluding petroleum products", you say.

      I said: "In actual fact, exports of 'other goods' (excluding oil and shipping) were 17 BEUR at the peak before the crisis and in 2016 they were 18 BEUR." Exactly which part of this sentence did you not understand?

      What matters with exports in the final analysis - just like with tourism - is not how many tourists have arrived or how many tons of agricultural products have been exported. What matters is how much cash come into the country from tourism and exports. The only place which can correctly monitor the cash from exports is always the Central Bank.

      So, thank you for you long lecture but regrettably it was besides my point.

      Delete
    2. Klaus:

      The fact that Greece maintains the same level of exports after seven years of crisis, deflation, recession caused by austerity is indeed an accomplishment and a mark of resilience.

      You are forgetting a number of things:

      1. The EU where Greece mostly exports is a declining and recession hit market, especially Italy where most of Greek exports end up going.

      2. Russia - an important destination for Greek ag products - remains off limits due to the mickey mouse sanctions Berlin is imposing on Russia.

      3. The fact that you didn't get a surge in exports shows you and the other euroclowns how little you understand of the Greek market and therefore what fools you are in trying to reform something you have no idea about. If there is a statement of failure about your austerity regime it just came through your lips.

      And all of this begs the question.What exactly are you euromorons pretend to have to offer Greece? You have no idea what you are talking about, let alone advise Greece in taking all the wrong courses of action. They only thing you could do really is disappear because your very presence turns automatically things into the wrong direction. And in doing so take your disgusting currency the wortless euro and stick it up you know where.

      Delete
    3. "Greece maintains the same level of exports after seven years of crisis, deflation, recession, etc."

      When a country is successful, this reads: "Greece could overcome the crisis, deflation, recession, etc. because it managed to grow itself out via exports".

      See the difference?

      Delete
    4. Klaus:

      You are dillusional. It was your idea for Greece to try to solve the german incompetence problem (as was manifested by the application of the wrong remedy for Greece) through trade without understanding the nature of Greek trade.

      In fact day after day you are begging in this blog for Greece to do so lest we expose Berlin's lack of depth and Greece refuses to do so. What does this tell you?

      Might I suggest that you stop this obsession of yours with trade because clearly it does not apply in the Greek case. Greece is a different kind of an economy and we will never turn ourselves into a german supply chain country. So get it out of your mind because it's a bad idea to begin with and stop begging Greece to comply with your erroneous fantasy.

      Delete
    5. The thing with you Klaus and the not so bright germanic menance is that you self-destroy your arguments.

      So in a year where Greece has to expand the port of Piraeus where COSCO is undertaking a major overhaul and cruise ship terminal expansion you expect Greece not to import the port machinery (cranes and other heavy equipment) in order to accomplish the work?

      Don't you understand that these are one time buys never to be repeated again and that investing one Billion euros in new equipment which is both a piece of cake and could only be accomplished through imports ?(Thank God none of these import machinery is german).

      But of course you have no ports or a fleet in Austria so what would you know about such things?

      By the way, how good is the Austrian Navy? I am just curious to find out.

      Delete
  5. If you want to write something about bad news about the eurozone then get a copy of this internal ECB report which pegs the Grexit cost to the eurozone to 1.5 trillion euros.

    Now let's talk about leverage in the negotiation game.

    http://www.imerisia.gr/article.asp?catid=26516&subid=2&pubid=114505395

    ReplyDelete
    Replies
    1. Well, I suggest that if Greece wants to use the threat of Grexit as leverage, all the government would need to do is to contact Schäuble and threaten him with Grexit unless he changes his tune.

      Delete
  6. Dear Sirs.

    May I kindly advise you that the validity of my offer of 2015 has been exceeded. Should you wish so, you are most welcome to participate in the ongoing Dutch auction.

    Wolfgang Schauble.

    ReplyDelete
    Replies
    1. There is nothing valid about your offer Deutche rat. In fact you are an invalid if I am not mistaken.

      Signed:

      The Greek person who is willing to beat you senseless for free.

      Delete
  7. @ Anonymous at 12:48 AM:
    Quote: "Tourism depends on German tourist spending which continues to go down per head per stay and it's now close to 500 euros per stay because to put it bluntly Germans are very cheap people and they would sell their mother to get a deal."

    In other words: Greece tourism industry appeals only to the bargain seekers and can not attract people with higher standards. Let’s hope that there will be investors willing and able to improve what Greece has to offer as a tourist destination.

    Urs

    ReplyDelete
    Replies
    1. We could also remedy the "cheap German" problem at the border by not allowing these clowns to come in to Greece to begin with. We could extend such controls to german speaking Swiss as well just for fun.

      Delete
    2. @Anonymous at 2:59 PM
      Quote:"We could also remedy the "cheap German" problem at the border by not allowing these clowns to come in to Greece to begin with."

      You mean EU-Grexit, article 50 and all that? Why not? I guess a net payer as the UK is definitely more missed by the other EU member states than a net recipient like Greece.

      "We could extend such controls to german speaking Swiss as well just for fun."

      Be careful what you wish for. Freedom of movement is part of our bileteral treaties with the EU. So again you have to leave the EU even if you want to get rid only of the Swiss. And Greece alone is a failed state. You know that, don’t you?
      Urs

      Delete
  8. Amazing how many words people have to use to convince themselves that a current account deficit does not exist, or is beneficial for Greece.

    ReplyDelete
    Replies
    1. Careful, a current account deficit is not necessary good or bad. It depends...

      A developing economy will almost always have a current account deficit because it needs to import so much capital equipment. That deficit, however, should normally be good because the capital equipment will eventually grow the economy and generate returns. The "bad" current account deficit is what Greece had in the first 10 years of the Euro. Imports were hardly for investment, much more for consumption. When short-term consumption is financed with long term debt, it's like borrowing money for a vacation. When you return, the fun of the vacation is over but the debt is still there.

      Delete
  9. You have got to admit it, in spite of the hardship Greece goes through she still has the famous Greek hospitality.

    ReplyDelete
  10. Hmmm...
    "Viewing the Current Account Deficit as a Capital Inflow" https://www.newyorkfed.org/medialibrary/media/research/current_issues/ci4-13.pdf

    ReplyDelete
    Replies
    1. This is a good article, thank you. The key formula underlying a balance of payments is: current account balance plus capital account balance must be zero.

      If the current account is plus, the capital account must be minus in the exact same amount.

      If the current account is minus (like in the US, or in Greece), the capital account is automatically plus in the same amount. I. e. there must be capital inflows.

      The key difference is how that capital inflow is composed. In Greece, it was/is composed almost entirely of debt. The absence of FDI is owed to the fact that Greece is such an unattractive place for investment. Even though I don't have the numbers, I presume that in the US the FDI portion is very large because the US is such a good place for investment. And FDI is obviously good for the economy.

      The only thing to consider with FDI is: what used to be domestically-owned assets become foreign-owned assets and the return on those assets which used to stay in the US now goes abroad (and further burdens the current account). At some abstract point in the future, the question would be: does it bother American society that all American equities, all of Manhattan real estate, half of Florida, etc. is owned by foreigners?

      Just one example (which is not really the best one): Deutsche Bank used to be the flagship of Germany, Inc. Almost equivalent to the Bundesbank. Today, Deutsche is still the same German corporation but its ownership and management control has essentially become Anglo-Saxon. Does German society like that? Not at all.

      Delete
    2. Klaus:

      I think we went over this before and the numbers prove that FDI in Greece is above the median for a 20-year period; in fact much more than the pre-crisis years.

      Delete
    3. Klaus:

      Unfortunately numbers are not in your favor. They show Greek FDI above average for 2016:

      http://www.tradingeconomics.com/greece/foreign-direct-investment

      Btw, when that useless clown show called Fraport closes finally the Greek airport package deal and has to pay 1 Billion euros for the privilege do you actually think that FDI for Greece might actually substantially improve or based on german cooking of the books might show in a different category?

      So why do you kick the Fraport a-holes right in the a$$ so that their lazy selves could pick up some speed because so far their takeoffs are not according to aviation practices?

      Delete
    4. Thanks for pointing this out. I had made the mistake of looking at net figures for several categories instead of breaking out the components. Here are the individual components.

      Current account: -1.103,9
      Capital account: 1.035,7
      FDI 3.403,1
      Portfolio Inv. -9.837,6
      Other investments 6.939,5
      Reserve assets -581,5
      Reconciling item -144,7

      So yes, FDI was significant but much more significant were the outflow due to portfolio investments (divestitures). What 'other investments' are is not quite clear to me but they are housed at the government. Perhaps EU grants.

      Delete
    5. Klaus:

      The problem is not the correct numbers interpretation. Rather it's your insistence that Greece could ever increase its competitiveness by using the euro.

      The evidence is overwhelming and it shows that actually Greece lost almost all of its competitiveness the minute it joined the eurozone. And we know we are not alone in this because the same and worse happened to Italy which has a lot more exports than Greece as a larger economy. Italy is far worse off today than the day it joined the euro and its competitiveness is suffering as a result.

      Therefore the terms competitiveness and the euro currency in Greece's case are contradictory by nature. One negates the other.

      So if you want Greece to be competitive then it needs a new currency. The so called reforms accomplish nothing really because they all have long term effects if any. So Greece's problem is that is focusing in the wrong short-term targets because Greece can not survive within the eurozone.

      Delete
  11. http://www.tradingeconomics.com/greece/current-account

    http://www.tradingeconomics.com/analytics/api.aspx?source=chart

    ReplyDelete
  12. Ideally, the current account deficit is covered by personal remittances from diaspora Greeks now working in other EU countries (or elsewhere).
    That's after all the economic model of other countries in EU: Latvia received 5% of GDP in personal remittances in 2015, Portugal 2% (it used to be more)
    By contrast, inbound personal remittances for Greece were closer to 0.2%

    And of course, there are also all the ONGs busy with the refugees: they are mostly not funded by the govt and a (large) part of their funding is foreign, so it covers part of the current account deficit (and explain some imports)

    See fig 4 for statistics 2015 of personal remittances
    http://ec.europa.eu/eurostat/statistics-explained/index.php/Personal_remittances_statistics

    All in all, I think the numbers are rather encouraging

    ReplyDelete
    Replies
    1. I just sent 2000 euros via wire to my aunt's account in Thessaloniki for the month of February 2017. I am sure the Greek system will not account for such transaction.

      Delete
    2. It will be accounted for as 'incoming foreign remittances' within the current account. Until the mid-1970s, such remittances were the most important source of foreign currency for Greece (greater than tourism!).

      Delete
    3. The point is this Klaus:

      Eventhough I sent 2000 to my mother's sister, the Greek bank allowed her only 30% usage while the 70% is subject to capital controls. Which means that my aunt will require several months to access the capital that on paper is hers but in reality controlled by stupid Stournaras of the BOG.

      So no matter how much money I send to my relatives, hoping to lubricate the Greek economy, the bank's first obligation was to put restrictions on such money.

      For as long as you have banks under the ECB regime it looks to me that there is no hope for Greece because its banks instead of facilitating business and the economy are actually instruments of control for the purpose of producing the exact opposite.

      Delete
    4. A friend of mine worked around this problem in a way which would work as follows for your aunt: you would open an account for your aunt at your bank, put the money in this account and give your aunt a bank card on that account. My friend does this with a German bank. They have a limit per withdrawal of 2.000 Euro. The same ATM which disburses only the Greek limit under capital controls, disburses up to 2.000 with a card on his foreign account.

      Delete
    5. Thanks for the tip; I have tried this solution and found it non satisfactory for the following reasons:

      I actually opened an account in my name with a US bank and game my relative the debit card associated with such account so they can withdraw as they pleased. The card had my name on it but when you go to an ATM machine and you know the pin number the machine does not care who withdraws the money. Problem was every time the card was used there was a transaction fee and a currency conversion fee which they add to quite a bit. We had a case that the card was used 3 times for a given month, each time for roughly 600 euros and the total fees paid amounted to over 100 euros. Great for the bank, very convenient for myself but not a good deal with my relative who saw her spending cash diminish.

      Because of an another account I have with high privileges wiring the money to Greece costs me nothing (it's a free service) and I can do the deposit in euros. This way my relative can use the entire amount of the transfer.

      Delete
    6. I know what you are talking about because I receive a small pension from the US. They pay by check and in USD, of course. Every month I look at horrendous check collection fees and bad exchange rates but there is nothing I can do about it.

      That's a reminder of a benefit of the Eurozone. It used to be the same way within Europe. And now I transfer EUR to our account in Greece free of charge in Austria (a 3 EUR charge in Greece which is actually not permitted because SEPA transfers should be fee of charge on both ends) and it takes exactly 2 working days. And when I use my Austrian bank card at a Greek ATM, I get all the cash I want (within my Austrian limit) and no charge in Greece or in Austria.

      Should Greece leave the Eurozone, I would certainly feel it...

      Delete
    7. Yes Klaus it's the same case. So we have finally a point of conversion? OMG!

      Delete
  13. Functional societies are a form of capital. Redistribution is just a way of allocating the return on that capital.
    "The returns to societal capital"
    https://growthecon.com/blog/Society-Dividend/

    ReplyDelete
  14. I am careful with the current account deficit. However, it will take an extended souvlaki take-away service to Wien to convert it to an export asset.

    ReplyDelete
  15. And speaking of the devil, ELPE (Greek Petroleum) has had a record year in earnings, production and exports. This all despite the fact that the fuels category for Greece has had a severe shrinkage in terms of exports in 2016. Which means probably two things: 1). The sector is undergoing consolidation with ELPE emerging the big winner and 2). the Greek economy is full of paradoxes:

    http://www.helpe.gr/en/media-center/press-releases/news-apotelesmata-d-trimhnoy-etoys-2016

    ReplyDelete
  16. Hellenic Petroleum's results bother me, not that I begrudge them, but I cannot explain them.
    The crude oil price is a pass through in refining, provided prices are constant, provided all sell at the same market, provided all buy at the same price. They live from the refining margins.
    The price of crude went up, so ELPE had some inventory gains, as had all the others.
    ELPE started buying from producers again, after years of buying expensive from traders due to their lousy credit rating.
    But the international benchmark refining margin dropped by 25%, partly due to new modern refineries coming onto stream. Try as I may, I can only fit it into a spreadsheet if I assume ELPE has dramatically reduced their refining margin, and THAT, is the most positive I have seen from any Greek company for years.
    Lennard

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    Replies
    1. The secret w/ ELPE is that not only includes Greece operations but also in Bulgaria, FYROM and Serbia.

      https://en.wikipedia.org/wiki/Hellenic_Petroleum

      Delete
  17. It is easy to max profits if you cut pay to the troika mandated hunger salary, let the refinery rotten and don't pay your suppliers. Don't you know it is a government company?

    ReplyDelete
    Replies
    1. Used to be. The company is now transitioning into a private enterprise. The major shareholder is Spiros Latsis the same guy whose real estate company (called Lamda Development - lamda in Greek is the letter L which stands for Latsis) became the succesful bidder for the old Athens airport called the Hellenikon Airport. The guy's net worth is about $2 Billion:

      https://en.wikipedia.org/wiki/Spiros_Latsis

      Delete
  18. I know that ELPE has not cut the rather generous wages and benefits the employees enjoy, if they had Greece would have noticed. ELPE is a union stronghold, as strong as PPC, they can paralyze Greece in a day or two.
    They are also not skimping on their maintenance. They have an upgrading and modernizing program that is remarkable. Their Nelson complexity index (sophistication and modernity) of 9,3 is close to USA average of 9,5, and way above European average.
    That they avoid paying their suppliers is unlikely, they are international "big boys", some of them nation states.
    You can only assume that they have cut "fat" and waste, it's a lot to cut. Thinking of Klaus's dogma, that money don't disappear, just change hands, ELPE's waste must have been somebody's income. Maybe one should not worry about it but just be happy that the waste now end up with the rightful owners, the shareholders, who will pay their due taxes. As another gent write, ELPE is not a state company anymore, the state has 35% shares and the Latsis family 40%. I do not know if the states shares are up for sale in the privatization program.
    Lennard

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    Replies
    1. Actually the 35% the state owns, if I am not mistken, primarily belongs to the ownership of DESPA (the natural gas distributor co. in Greece). DESPA was supposed to have been sold to the Azeri state company SOCAR but the deal fell through due to some EU regulations on unbundling of gas pipeline ownership.

      My point is that as soon as DESPA is sold (and it will be sold as a state asset administered by TAIPED - the same agency which sold the Hellenikon airport in Glyfada) then basically ELPE will receive its share of the DESPA sale proceeds and the state will no longer be a participant in ELPE. It was supposed to have happened already but as is the case will all Greek asset sales "it's complicated".

      Delete
  19. "After Mattis’s closed-door meeting with defense ministers, NATO Secretary General Jens Stoltenberg said at a press conference, “This is not the US telling Europe to increase defense spending. This is 28 allies, heads of states and governments sitting around the same table in 2014, and looking into each other’s eyes and agreeing that we shall increase defense spending.”
    The NATO secretary general’s analysis is wrong. This is the US telling Europe to increase its defense spending. There will be a tangible change in NATO member states’ behavior, or there will be a tangible change in US support for NATO. If the second scenario takes shape, NATO will be replaced by a greater emphasis on important bilateral relationships.
    The US has asked for help and hasn’t gotten it. The US is now demanding help. NATO member states face a serious choice over whether to give the US this help. The US wants NATO meetings to be gatherings of officials from 28 allies sitting around a table, each clear-eyed about the alliance’s goals, and bearing a proportional share of the cost of achieving those goals. For the US, that is a measure of success. It is not a description of reality."

    ReplyDelete
  20. How nice! I guess Greece ( a seafaring country) could learn from Austria (a mountain blocked country) after all:

    http://www.express.co.uk/news/world/773328/Austria-passes-harsh-bill-banning-migrants-food-housing-Europe

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    Replies
    1. @Anonymous at 5:21 AM:

      1. How many rejected refugees are there in Greece?
      2. How much has Greece spent for rejected refugees in 2016?
      3. What has "seafaring country" vs. "mountain blocked" to do with migration policy?

      Urs

      Delete
    2. Urs:

      1. What do you mean by "rejected" refugees?

      2. Why would Greece have anything to do with refugees (most likely economic migrants) whose final destintion is Europe minus Greece? Why would Greece be responsible for the final destination of these "refugees" which we know with certainty is not Greece?

      3. Have you ever heard of the term "revenge of geography"? What does this mean to you in terms of a maritime nation vs. a land locked country? Do you think that they are the same?

      Delete
    3. @ Anonymous at 12:55 PM:

      1. Asylum seekers who’se application has been turned down.

      2. Please put these questions to Anonymous March 1, 2017 at 5:21 AM. He came up with this issue. I just answered his post.

      3. Yes, nothing specific, no. Now please answer my question.

      Urs

      Delete
    4. @Anonymous 12.55pm

      Your 2) is pretty weak.
      The EC is trying to create a sense of shared responsibility between EU countries for refugees, at least for those not in scope of the Turkey deal)
      But no such thing exist for non refugees.

      BTW, they are human beings, treat them well and use the best you can the funds Greece receives to help handle the issue. Spare a thought for Lebanon, Jordan who cope by themselves.

      Delete
    5. Congratulations! Whether purposefully or not, you managed to distill the very essence of that smug hypocrisy with which certain north-Europeans “progressives” desperately try to reconcile their “liberal” values with their very dear national(/istic) interest: you guys care for refugees so much that, when not voting en masse for neo-fascists parties, who can barely let a day go by without a sort of Nazi apologia, your main concern is how to establish “humanitarian” concentration camps as far away to the south of your borders as possible, where lucky candidates, worthy of that north-European living, should be properly sorted-out and accordingly prepared.

      It’s only then that you can engage, with a clear conscience, in a sincere and in-depth evaluation of the situation: 1) The intended destination of these people is irrelevant and should be kept out of the discussion 2) “The EC is trying to create a sense of shared responsibility between EU countries for refugees”, which means that the famed European relocation program can be indefinitely postponed ad calendas grecas without repercussions for anyone except … Greece 3) Don’t we pay good money so that THESE people keep THOSE people away from us and sort out the least displeasing amongst them, in the unlikely chance we ever felt that our societal, fiscal, cultural or whatever circumstances are optimal for us to collect them? 4) And if objections are still being raised from those southerners, why not remind them, always with the appropriate unwavering humanitarian posture, of what’s happening even further to their south? Aren’t you,guys,grateful we got you back, if you know what I mean …?

      So, thanks for the kind reminder and the mindful advice but, next time, don’t bother hiding your cynicism and passive-aggressiveness behind lofty pretences. Not only is sincerity much more appreciated but you’re not fooling anybody anyway.

      Lykinos

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    6. @ Jerome Druesne / @ Lykinos

      Guys you should not be taken by trolls who try to derail the discussions on the issue at hand which is kleingut’s post on Greek’s 2016 current account deficit and not migration policies. Anonymous at March 1, 2017 at 5:21 AM (trolls will never sign their drivel) came up with this totally unrelated issue (refugee politics in Austria) in order to distract us from discussing economics. In future we should ignore posts like his.

      Urs

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    7. Hi Lykinos,
      Read the comment I was answering: Anonymous says he does not think they are probably not refugees in his view.

      I simply remind him that my country and others has accepted to take refugees.
      But if they are not, then their final destination is not the other EU countries.

      Now if you want to present some excuses, feel free to do so, that's not your usual tone

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    8. Hi Jerome!

      It’s in fact your first response I found and continue to find passive-aggressive and I think I responded in the appropriate tone, minus the passive-.

      Why you got that reaction out of me, I think I covered it adequately in my original comment. And unless I have misunderstood what you meant to say, I don’t think you’re owned any excuses whatsoever.

      I’ve also noticed that, much like the anonymous commentator that started that tangential thread, albeit to a lesser extent, you’re careful to draw the distinction between refugees and “non refugees”. In this case, I’ll have to remind you that “refugee” is a term that many European countries are very anxious to manipulate: if nowadays people that flee war-torn Iraq, Afghanistan, Libya or even Eritrea see their statue as refugees challenged or decidedly revoked, is it really so difficult to imagine that it won’t be long before Syrians join their unfortunate ranks? When this day comes, our northern partners, much as they have already done or are trying to do so, may as well wash their hands of them too and have us reminded that “BTW, they are human beings” but non-refugees so the … much sought-after “sense of shared responsibility between EU countries” does not cover them and they are now yet another problem Greece presents us with but, hey! Don’t be ungrateful and “spare a though for Lebanon, Jordan etc”…

      But instead of repeating myself, I have to ask you what you mean in your reply by that: “But if they are not, then their final destination is not the other EU countries”. Let’s hope you’re not addressing me as yet another Northerner wagging the finger and preaching humanitarianism and European values whilst boldly … hidden behind Dublin II; cause if that’s the case, then obviously my original tone was way too mellow for such a nerve.

      Finally, I don’t know what your home country is. Judging by your commentator’s name, I’d venture … France or even Belgium or Switzerland; but then, surely, you wouldn’t have dared to write: “my country […] has accepted to take refugees”. So, I remain curious…

      PS. Despite all, the irony about my usual tone didn’t go unappreciated.Well done!

      Lykinos

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  21. European countries have only carried out 8% of the promised refugee relocation, but it is like an outstanding bill the commissioner for migrants say, you will have to pay it. Well, Avramopoulos should know about debt.
    Of the 2015 migrant wave Greece retained a per capita proportion roughly half of Germany, Austria and even Hungary.

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  22. This should put the usual export story to rest:
    "Euro share of world exports"
    https://kkalev4economy.wordpress.com/2017/03/02/euro-share-of-world-exports/

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    1. @ CrossoverMarch 9, 2017 at 10:26 AM:

      Thanks for the link. Very good post indeed that perfectly debunks the myth of those uber-competitive northerners.

      Urs

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    2. It debunks the myth that the adjustment programs were a success in boosting exports, except in Greece.

      You're certainly not very competitive in comprehension, are you ?

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    3. Before I fall for those statistics, I would need to know who compiled them and how. According to these stats, German exports would even have declined as a percentage of worldwide exports. That would be in contradiction to just about everything I have read in recent years.

      In which currency were these stats calculated? If in USD, then obviously German exports would have lost market share because the Euro devalued so much against the USD since 2010.

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    4. The author does not state which database he used. With that said, with a brief search I found this: http://stat.wto.org/CountryProfile/WSDBCountryPFView.aspx?Country=DE&Language=E

      Which confirms the figure for the German export share of goods for 2015.

      The currency that is used is mostly irrelevant for the purpose of this study because even if it is the USD (or any other currency) it has to be a fixed exchange rate that is used for all years.
      So if the figures are converted to the EUR/USD rate of 1/1/2017, the study is consistent as long as all figures for all countries and for all years are using that rate.

      It makes no sense changing the conversion rate every year and that is certainly not the case.

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  23. Same picture from Eurostat (look the graph down below which splits market share in export of goods and exports of services) http://ec.europa.eu/eurostat/web/macroeconomic-imbalances-procedure/export-market-shares

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    1. I am still not 'sold' by these stats. Look at the countries which increased market share. They are mostly smaller economies with correspondingly smaller export amounts. These countries would have dramatically changed the composition of worldwide exports? Where is China on the chart? The US? How often have I read that Germany surpassed China as the world's largest exporter? And now the world's largest exporter who, presumably, achieved that position by growing exports faster than others, should now have had a declining market share??? Something doesn't add up here.

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    2. Not sure what your point is. Over the period that the eurostat graph is measuring (2004-2015) Germany's export share has fluctuated from 9.4 to 7.6 i.e. about 2%.

      Why is it not possible that a sum of other countries, smaller ones or even including US and China, could not explain this change?

      According to WTO, in 2014 Germany had not surpassed China:
      https://www.wto.org/english/res_e/statis_e/its2015_e/its2015_e.pdf

      You should revisit the sources that made such claims. Either false or they could be talking about something else (e.g. Export share to a specific group of countries i.e. Advanced,Emerging,OECD, etc)

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    3. One difference is that here they talk about "exports & services" (which is NOT the trade balance; much more like the current account). At the same time, I simply cannot believe that Germany, with substantial year-on-year export growth for years, would have seen a decline it its worldwide market share. But then, everything is possible and perhaps we have all been unfair to Germany.

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    4. Although it is interesting that out of a study showing that the adjustment programs practically achieved nothing as far as their stated objectives are concerned, the first conclusion you're ready to draw is that Germany may have been misjudged, (but no comments on whether the Greek "failure to boost exports" were misguided), nevertheless exports alone say nothing, as long as the criticism towards Germany has been that it is sucking up global demand.And the only way to do that is via NET exports, not exports per se.

      In that case, what you additionally need to see is what the evolution of Germany's share of global imports has been over the same period. Yet if anything, its growing current account surplus must necessarily imply that it's import share must have fallen faster than its export share.

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    5. @ Crossover on March 10, 2017 at 8:55 AM
      @ Crossover on March 10, 2017 at 2:22 PM

      LOL, oh my your (and the authors) narrative fires back and you didn’t even noticed it?
      Not sure if I am competitive in comprehension but I am certainly very competitive compared to you.

      Urs

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    6. That you believe that it somehow fires back, merely means that my previous reply to you still stands.
      Have a nice day with your 5 year old comebacks.

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    7. @ CrossoverMarch 11, 2017 at 11:54 AM:
      Well, it obviously either refutes the narrative of the beggar thy neighbour germans or it gets the numbers wrong. I realized it, kleingut realized it - it’s just you who doesn’t get it. There is more to discussing economic issues than just copy-pasting other peoples pieces and opinions.

      Urs

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    8. Do you really wanna discuss this? If yes then please refer to my March 10, 2017 at 2:22 PM comment which you mocked and tell me what is wrong with it.

      For starters I am the only one (as far as my exchange with kleingut goes ) to provide data. You are the one to jump to arbitary conclusions.

      Since when exports alone say anything about beggar thy neighbor policies? What does being the top world exporter say about a beggar they neighbor policy?
      You don't even understand what a beggar thy neighbor policy is about.

      Like I said on the comment I referred you to, Germany is accused of actively trying to attract demand from abroad. This is not an accusation of too high exports, rather one of too high a current account surplus. You cannot discuss this without looking at imports. Just as exports are drawing from demand abroad, imports are contributing to demand abroad.

      By your own logic a hypothetical country that is the world's top exporter yet has a balanced current account or a current account deficit could be accused for beggar thy neighbor policies.
      In short, you don't know what you are talking about.

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    9. @ Crossover March 12, 2017 at 12:42 PM:
      1. Yes I would like to discuss this because a discussion may help to make kleinguts (and my) claim that Greece and other former soft currency countries need to develop additional export oriented industries more comprehensible (you and the blog post you cited claimed that this policy failed).
      2. I don’t discuss this in order to defend Germany as such but a certain economic model. In Switzerland merchandise exports have a share of over 60% of GDP (Austria over 50%, Germany around 45%, Greece 31% you get the picture).
      3.My point is that trade and curent account surplusses (or deficits for that matter) can not balanced by those with strong and competitive industries but only by those with weak and uncompetitive ones as you can not force neither private nor official demand to buy products or services they deem unattractive either because of their price or their quality. You write: "Germany is accused of actively trying to attract demand from abroad" Hell, that’s what you are supposed to do in a free market society. If Greek companies would attract more demand from abroad they would at the same time keep more of their domestic demand thus fighting trade and current account deficits on both fronts.
      3. Even if Switzerland for example would strengthen demand through a more inflationary fiscal or monetary policy do you reaaly think that this would help countries that do not have so much to offer that the Swiss would like to buy? Greece is already our third largest tourist destination after Turkey lost this place.
      4. What I mock is the habit of looking for culprits (or better: scapegoats) for Greece economic slump all over the place but not in Greece. This btw. is not so much a problem for the countries you and others accuse of being responsible for her ills but for Greece and the Greeks.
      5. You claim that Germany’s shrinking share of world trade can be explained by her shrinking imports. If this would be the case the imports has had to be shrunken in total numbers. I seriously doubt that. Please give me the numbers. As far as I remember her exports and imports were growing (just that the exports were faster growing than her imports).

      Urs

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  24. And what exactly does 1-2-3 have to do with my initial comment and your "smart ass" response. How does 1-2-3 prove that the data on the article I posted has "backfired" ?

    5: You have a serious reading problem. The data shows that Germany's export share has shrunk. This DOES NOT imply that exports have not grown.It merely means that GLOBAL exports have grown faster than Germany's. Therefore I never claimed that Germany's trade has shrunk.

    It's nice that you want to lecture others on economics yet you can't understand the difference between a growing/shrinking export/import share and growing/shrinking exports/imports in absolute terms.

    It is perfectly possible for Germany's exports and imports to grow while its respective share of world exports and imports to fall.

    Furthermore, since it is obvious that global exports = global imports,
    then if Germany's export share fell, the only way it could post even larger current account surpluses than before, is if and only if it's import share fell faster. That does not mean that exports or imports fell in absolute terms. It only means that if both exports and imports grew, then exports grew faster.

    Further, I need only remind you that my original comment was meant to show that the so called adjustment programs, failed everywhere as far as their aim was the so called "transformation and import substitution". Had nothing to do with Germany at all. Instead it was meant to show that what is framed as the "Greek exception" is not that much of an exception after all.

    But while you even claim that you don't want to defend Germany, this was the first thing you did and now you can't even back it since you haven't shown how exactly the data has backfired.

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    1. @Crossover March 12, 2017 at 6:24 PM:

      1. It is quite satisfying for me to realize that you agree to most of my post from March 12, 2017 at 4:09 PM as you refrain to discuss my arguments from 1 - 4.
      2. I may remind you that the post you cited did not claim that Germany’s share in word trade fell but her share in word exports. I think it is fair to say that this means that other countries exports must have grown substantially faster than Germany’s. Don’t you think that this debunks the myth of the uber-competitive northerners as I wrote in my initial "smart ass" comment? And did you notice that defending Germany was not "the first thing" I did? I defended european countries (northerners) that were accused of being "too competitive". When even these countries lose ground in world exports a policy that tries to strengthen the productivity and competitiveness of even weaker exporters within the Euro zone is of utmost importance. If you just wanted to claim that this policy was not successful and that more efforts have to be made I don’t understand you agressive response to my initial positive response.

      Urs

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