ANALYSIS: The astonishing degree of bad forecasting foisted on Greece

Let us forgive those shoving Hellenic heads down the toilet, for they know not what they’re doing

The Troika and other Centres of Incompetence within Brussels-am-Berlin have been making predictions in one form or another about Greece since early 2010. The inaccuracy of these prévisions make the British Met Office seem a model of 99.9% accuracy by comparison.

Yesterday having been May Day, Athens was replete  with protests organised by public and private sector unions and opposition parties. As a result (and to make life difficult for the sake of it) the Samaras shambles government closed four metro stations in central Athens from 9 am. Obviously, the Athenian population was protesting about a pointless austerity that has ripped the heart from the City’s economy without anaesthetic. But in truth, they should be demonstrating about this being brought upon their heads by people who clearly have no idea WTF they’re about.

One can begin illustrating the Troikanaut level of braindeath using the medium of their forecasts since 2010.

lagshotLawyer, no economics degree

Starting with GDP forecasts, according to The Plan, GDP was supposed to bottom out in 2011 at ~8% below its 2008 level. By 2012, the Greek economy was supposed to be growing at 1.1%. Instead, GDP is 20% below its 2008 level and continuing to contract. In Troikaland, growth only ever occurs Next Year.

Moving onto the country’s debt, the initial forecast saw Greece’s debt/GDP ratio peaking at 149% of GDP in 2011 and 2012. But this assumed a starting point of 115% of GDP in 2009. Instead, debt in 2009 was 130% of GDP and the peak came in 2011 at 171% before a restructuring brought it down to 157% of GDP in 2012.

legshotPoet, no economics degree

As to inflation, the forecast in 2010 expected that prices in 2012 would be a mere 4% higher than in 2008. Instead, prices in 2012 were 10% higher than in 2008—a miss of some 160%. As the IMF explained later, it underestimated the “monopolistic and quasi-monopolistic structures of the Greek marketplace” that would prevent prices from falling. Actually, the main thing Lagarde grossly underestimated was her personal ignorance, despite the fact that simply reading her own hopeless forecasts about the French deficit (when she was in charge there) could’ve provided here with a very clear steer about it.

logshotSpook, no economics degree

And last but not least, unemployment. The 2010 forecast predicted that unemployment would peak at 14.8% in 2012 before declining to 14.3% in 2013. Instead, unemployment in 2012 averaged 24.2% and reached 26% in Q4 2012. The Troika was one year, 60% and 500,000 people adrift in that area.

All up, the Greek economy has contracted by more than twice the amount forecast in May 2010, prices have risen 1.6 times faster than anticipated, and unemployment has been 60% higher than predicted.
First degree idiot
As for the use of tax increases, the recent shale-fracking debate clearly had a major influence on the BamB Gauleiters, in that it led them to believe they could extract blood from stone. But this too proved a false hope. Massive tax hikes in Greece continue to backfired, the Greek Finance Ministry this week recording a huge leap in overdue payments from citizens by €800m in March, bringing the total outstanding to more than €2.17bn. I suppose if someone doubles the electricity tax on a bill you couldn’t pay last time, this is not that unexpected an outcome. The fresh arrears brought the total amount of debts to the state from all sectors to €57.2bn.

And the latest diagnosis? Greek finance minister Stournaras and Troikanaut Thomsen two weeks ago forecast a gradual return to growth for Greece ‘from’ 2014. Greece was, said the latter, “on track”. I’m at a loss to know what track he was referring to, but it certainly wasn’t anything to do with the forecasts tracked above. I’m thinking of changing my personal noun for Greece’s creditors to Troikanoughts.

Meanwhile, having rogered Greece anally with a yard-brush since 2009, German carpetbaggers continue to try and steal the country’s remaining gold.  A second man traveling with 15.7 kilos of unregistered gold destined for the Fatherland was detected by customs officials at Athens International Airport on April 26. Two weeks earlier, customs officials at the same airport arrested a 32-year-old German national in possession of 470 kilos of silver, 7 kilos of gold and 293,000 euros in cash. It seems that every Greek cloud has a German silver lining; but when it comes to Troika expertise, all that glistens is not gold. To be precise here, none of it is.

Related: How Troika anti-Greek spin made a bad situation desperate