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2013 August 17 Saturday
Greek Economy Shrinks 20 Quarters In A Row So Far

A ParaPundit post from a few months ago: Greek Economy Shrinks 19 Quarters In A Row So Far. The Greeks have now reached an even worse milestone: 20 quarters (5 years) going down and still counting.

The 24% contraction since 2008 is similar to the US Great Depression contraction of 27%. So the Greeks will probably surpass the worst US economic contraction some time in 2014 or 2015.

You might think that central bankers and economists know how to avoid economic contractions that severe. But Greece gave up having its own central bank when it joined the Euro zone. The entry into the Euro zone also emboldened northern European banks to irresponsibly loan the Greek government far too much money. The Euro enabled a double whammy: bigger bubble and less control of the aftermath.

Share |      By Randall Parker at 2013 August 17 09:25 PM 


Comments
destructure said at August 18, 2013 4:39 AM:

The problem with Greece's economy is that they can't compete with the EU. Normally, a country would respond by devaluing their currency. That would make its exports cheaper and imports more expensive maintaining a reasonable trade balance. But they're tied to the Euro so they can't do that. They have no choice but to abandon the Euro currency. In fact, all the EU countries should. It's too bad US states are prohibited from printing their own currency.

asdf said at August 18, 2013 8:16 PM:

Sometimes I feel like its almost an experiment to see what would happen with another depression. After all, there are fascists in Greece again.

Golden Dawn said at August 18, 2013 8:50 PM:

"After all, there are fascists in Greece again."

Wouldn't hurt to have a few here.


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