The Troika gave us "Fs" in everything!

The first round of Troika inspections and the envoys of the country’s lenders are at a pause until Tuesday, in order to draw up their negotiation agenda for Wednesday’s new Memorandum.

Throughout the past days, however, the auditors have not concealed their disappointment about the poor performance of the economic policy, which seems to have “clogged up”. Thus, a “restart” of the Memorandum is being discussed and decisions are being taken, which will determine the fate of Greece’s new loan request.

The “wounds” of the government’s imposed economic policy are many and deep. The recession threatens all objectives set by the Memorandum. The decline of the Greek GDP was in any case greater than expected, which has directly affected the revenue expected by the public sector through income taxation and social security contributions.

As a result of the above, the deficit target is unattainable. Our country was supposed to reduce the deficit to 7.4% of the GDP from 2010’s 10.5%. According to foreign expert calculations, the fiscal deficit will fall to 9.4 or 9.5% this year. The Troika is pushing for doubling the amount of corrective measures to be taken throughout the year, i.e. close to 6 billion’s worth.

The budget in its entirety lies outside the Memorandum’s planned margins. During the first quarter, revenue was reduced by 9.2% in comparison to last year, instead of the 8.5% rise that the government had counted upon. Thus, the budget’s “black hole” is over 2 billion euro since, besides the significant shortfall in revenue, government spending has also overshot its mark.

Also greater than expected is the “addition” on interest rates. The increase in the public sector’s interest this year will amount to at least 100 million, according to Troika calculations, and will exceed 16 billion as opposed to the pre-planned 15.9 billion that the budget had forecast.

The pace of privatization is also disappointing, since the hiring of consultants is being delayed, whereas the initiative to raise15 billion by 2013 and 50 billion by 2015 is overdue.

Darkness everywhere

The deep recession remains the thorn in the side of all regulated professions and markets. GDP has recorded a drop of 6% on a 12-month basis.

In this climate, industrial production has also taken a dive, disappearing into the depths of a -8% in March, hand-in-hand with construction activities.

The issuance of new building permits fell by 62.8% in January of 2011, with their number dropping from 4051 (in 2010) to 1512!

There is also a prolonged investment apnea in Greece, despite the announced fast-track mechanisms. After the Astakos investment fiasco, the danger is ever-present for the old airport area in Elliniko. Discussions with Qatar are still ongoing, but at modest levels.

In terms of the real economy, new bank loans have hit a record low. Credit expansion for businesses and households fell another 0.4% in March, from 0.3% in February.

As a result of the aforementioned data, unemployment rates are skyrocketing with each passing month - 11.3% in January 2010, 15.1% in January 2011 and 15.9% in February 2011. According to ELSTAT, 181.952 people have been added to the long list of the unemployed. If the gloomy estimate of 1 million unemployed is confirmed, then the recovery will be terribly slow to return, while social and fiscal escalation will continue.