REVEALED….the eurozone deficit sinners whose incompetence makes Greece look like Snow White by comparison


The original Maastricht Treaty set out a very clear debt-to-gdp ceiling of 60% for ’emu’ (later the eurozone) as a whole.

Today the eurozone reveals a debt to gdp percentage at 93%. More than 50% over the limit.

But feast your eyes on this stat: The 2015 Q1 eurozone debt just leapt to €9.4 TRILLION.


Or put another way, more than 26 times bigger than the total Greek debt at 12.45pm today 22nd July 2015 – which stood at just over €357bn.

Take note of these equally irrefutable facts:

1.There are 19 nations in the eurozone, but Greek debt is only one twenty-sixth of it.

2. The eurozone got to this brilliant debt result without the ‘aid’ of any ‘bailouts’. Greece is about to get its third, and during the first two its debt/gdp ratio went UP.

Greece’s debt to gdp ratio when Prime Minister Papandreou formally requested help from the EU on 23rd April 2010 was 129.7%. Today, it stands at 177% of gdp. Some bailout, eh?

There is but one simple conclusion to draw from this, based on the maths outlined above: Greece would’ve been better off without “help” from the eurozone, for the simple reason that those in charge of the eurozone couldn’t hit a barn with a blunderbuss….let alone keep within deficit targets.

Consider: the guideline set for emu States’ debt/gdp ratios was 60%. This chart shows how the main eurozoners fared last year (2014):

ezonerstableWell good gracious me, look at that.

Just 2.3% of the eurozone’s total economy stuck to the Maastricht rules. Those who didn’t included Schäuble’s Germany, Hollande’s France, Dijesslbleom’s Netherlands, Verhofstadt’s Belgium and Rajoy’s Spain.

So for not sticking to the rules as a State bringing 1.3% of gdp to the table, Greece’s independence has been beaten to a pulp by those States who broke all the rules as well…but represent 51.7% of eurozone gdp.

I didn’t include Italy in the 51.7% hypocritical sanctimony sector, because on the whole the Italians have been understanding about the Greek position. But the Mario Draghi whose ECB dramatically worsened Greek debt sustainability via blackmail over the last three weeks hails from Italy…a country whose gdp risk factor is exactly nine times that of Greece.

Mario Draghi is also the QE-er who plans to add €1.1 trillion of eurozone spend on an alleged form of economic stimulation that has now been tried 19 times around the World…and never once stimulated anything beyond stock market share prices and banker bonuses.

Is it time for Yanis Varoufakis to take a job at the IMF….and demand 100% 24/7 access to its offices and books prior to building a class action case against Jean-Claude Trichet for the encouragement of odious debt?

If that seems like a melodramatic question, then think on this: from 2006 to 2009, Greek gdp leapt from €250bn to €350bn, during which Trichet’s ECB actively encouraged the PASOK government to borrow in order to invest in infrastructure….using explosive growth as collateral.

26 thoughts on “REVEALED….the eurozone deficit sinners whose incompetence makes Greece look like Snow White by comparison

  1. “If that seems like a melodramatic question, then think on this: from 2006 to 2009, Greek gdp leapt from €250bn to €350bn, during which Trichet’s ECB actively encouraged the PASOK government to borrow in order to invest in infrastructure….using explosive growth as collateral.”

    And that is exactly why the ECB, rather than Greece, should carry the can. They have been absolutely useless, the biggest employer of economists in the world, but did not do anything about it. Surely, also i the Eurozone trade deficits, or more correctly, current account deficists matter, together with the fact that in none of the years Greece met deficit criteria.

    How could one have missed it?


  2. nice and concise JW.. thank you. the crims who run the show have been bankrupt for some time so they cannot halt the printing presses for long. all of their words are omnidirectional misinformation.


  3. ExceIIent JW!! It wouId be interesting if you added ItaIy onto the 51.7% just to see the totaI…despite being good guys [& next in Iine for ScheubIe massage]. Too hot here to work it out myself…..fried brain syndrome & no aircon…

    Don’t forget, too, that back in February DraghuIa cut Greece off from the markets 1O days into Syriza’s new government , forcing Greece to finance 6 months of non-negotiations – due to EU stonewalling and bad faith – and IMF payments from its own “fat” – NOT a smaII detaiI.


  4. The Greeks sold the gold monday to raise some cash.
    In 6 months, everyone will be doing it on the street.

    That’s where we are in the cycle..


  5. Things are grimm but could be improved by some red hot iron shoes for the Merkelwittchen, a poisoned apple for Grumpy, a poisoned comb for Dopey and a glass coffin for the euro; they’ve all been looking in the magic mirror for too long.


  6. Reinhart and Rogoff stated that once debt to GDP hits 90% then the debt levels act to drag down any future growth. So the UK, most of the EU, America and Japan can expect stagnant or no growth in the years to come.


  7. @H
    Reminds me of “Snow White & The Seven Samurai” by Tom Holt. In the book, the world’s “operating system” is called “Mirrors 6.8” (or maybe a different version number!)…if you have not read it, I heartily recommend it!


  8. @RR
    I think that you will find that those two unfortunates said that more than just the once leading to:
    “Appearing in the aftermath of the financial crisis of 2007–2008, it (the R-R claptrap) provided support for pro-austerity policies. In 2013, academic critics demonstrated that the paper used flawed methodology, and that the underlying data did not support the authors’ conclusions. Consequently, its critics hold that this paper led to unjustified adoption of austerity policies for countries with various levels of public debt.”


  9. No, because if an economy grows due to fiscal stimulus then interest rates rise and the rise in government bond yields kills the economy as the debt becomes untenable.


  10. When comparing Debt, I think a country’s total Debt is the appropriate starting point i.e. Government Debt, Current Account Debt/Surplus plus Household Debt.

    The UK is running deficits in all three categories that makes them much more vulnerable than the sole Debt of the Government.

    The UK it appears to me is dependent on hot foreign money to a frightening extent, it is rumoured that London is the foremost location for money laundering in the world.

    Along with the US it seems sad that both countries allow real estate to be exempt from cash regulations i.e. all cash transactions do not go through the process of ‘how was this money obtained?’ that is more and more required for ever smaller amounts of cash for the population at large.


  11. Money is created as debt in fractional reserve banking (FRB), which is the money system that drives the world. In it, debt mounts and becomes burdensome when growth falters. As borrower of last resort, government accounts look uglier and uglier as the economy stubbornly stagnates: tapped out consumers and businesses mean govt is required to try and kick start growth by borrowing. However, in the commercial realm, banks prefer stock markets to risky lending. Low growth = higher probability of default, and unlike the economy as a whole, stock markets can be goosed (and have been since forever). The resultant GDP-debt ratios are unevenly distributed across the globe, with some nations faring worse than others, but the problem is systemic nonetheless.

    If we accept that infinite growth is impossible on a finite planet, and further that the FRB system requires growth to function properly (it does), by extension we have to accept that at some point the FRB system is the problem, rather like a cancer. FRB systems tend to last around 70 years give or take, but we’ve had a couple of world wars whose destruction (of debt and infrastructure) made growth possible all over again, so this system has had refreshing reboots. There are other complicating factors extending its run (i.e. the global nature of the system means a planned reset is unthinkable), but nothing lasts for ever, especially not infinite growth and systems that require it.

    Iceland’s response is more intelligent than Europe’s. In other words, Iceland demonstrates that TINA is a lie. Indeed, there are all sorts of solutions, and a change from mindless consumerism to something more meaningful is hardly a horrible thought. However, old habits die hard, especially when the sociopathic ‘elite’ will do whatever it takes to keep this snowball rolling. It is enormously frustrating to see the vast majority of the mainstream and orthodoxy stick their fingers in their ears and sing lalala loudly in the face of this, but, at last, the cracks are beginning to show:

    Not a perfect article (there can be no such thing), but a very good effort in the right direction. Heaven knows we need more like it. In the meantime, crazy whackjob ideas like guaranteed income, steady-state economics, full-reserve banking (i.e. like that from Positive Money), negative interest rates to discourage hoarding, a redesign of the work-pension situation, a new look at the role of jobs in society, an open and thorough debate on what wealth and value are, radical education reform and much else besides also need to find their way onto the mainstream agenda. It’s a tall order, but the situation demands it.


  12. The debt to GDP will continue to rise as countries try to maintain a standard of living that is not possible in a world economy. Now (before Crash2) the price of items we buy is set by China after Crash2 wages WORLDWIDE will reset to those paid in China, currently this is about 155 pounds per month… Either that scenario or a massive world war take your pick.


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