Submitted by Taps Coogan on the 11th of August 2017 to The Sounding Line.
Back in May, here at The Sounding Line, we pointed out that the Greek economy had shrunk 9% since adopting the Euro in 2002, showing that Greece had experienced essentially no economic benefit since joining the Euro and had lost an entire generation’s worth of economic growth and prosperity:
“The Greek economy is now 9% smaller than when Greece adopted the Euro in 2002. By that fact alone, the Greek economy has experienced some of the worst long term economic ‘growth’ in the entire world.”
While the statement that Greece has experienced some of the worst economic performance in the world may seem like hyperbole, sadly, it is not the case. To illustrate that point further, we analyzed the real gross domestic product (GDP) of every country in the world from 2000 to 2016 in inflation adjusted local currencies based on data from the World Bank. The only countries that were omitted were the handful of countries for which the relevant economic data was not available due to: military conflicts (Somalia, Afghanistan, Syria), not having existed in 2000 (South Sudan), being microstates (Monaco, Andorra, etc..), or in the case of Venezuela and North Korea, an inflation rate that is no longer computable or is unknown. Ultimately, data was available for 181 countries.
Barring the aforementioned countries, Greece has experienced the largest absolute reduction in real GDP of any country in the world in the 21st century and the third (tied with the Central African Republic) worst economic growth rate of any country in the world.
The apparent negative effects of joining the Eurozone aren’t limited to Greece. Immediately following Greece and the Central African Republic comes Italy, which has seen the fourth slowest economic growth in the world in the 21st century, barely 1% growth over the last 16th years. Not far behind, Portugal was the world’s sixth slowest economy at 4% growth over the last 16 years. Remarkably, of the 25 slowest growing countries in the world, seven were Eurozone countries including Germany (somewhat surprisingly), the Netherlands, Finland, and France. Denmark, which is in the EU, but not the Eurozone, was also among the 25 slowest growing countries. I suppose some congratulations are in order to the Eurozone economic leaders for shrinking the economy of Greece less (only on a percentage basis) than 93 year old dictator Robert Mugabe in Zimbabwe and the various factions that run war torn Yemen.
In other words, over the last 17 years, Greek, Italian, and Portuguese economic growth has been worse than in Iraq (despite 15 years of grueling war and insurgency), Iran (despite years of crushing international sanctions), Ukraine (despite its conflict with Russia), Liberia (despite civil war and thousands killed by Ebola), Sudan (despite years of genocide, civil war, and literally being split into two countries), and just about every other country in the world.
It is, of course, more difficult for large developed economies to maintain high rates of growth. However, this is no excuse for the negative or near zero growth seen in Greece, Italy, and Portugal. All large developed economies outside the Eurozone grew quite substantially during the same period. This is especially true given that Japan’s famously slow economy grew a comparatively rapid 13%, Switzerland grew 31%, the UK: 32%, the US: 33%, Canada: 36%, Australia: 59%, and Russia: 71%. China grew an astounding 325%.
While economic growth is not the only important economic metric to judge economies, nor does it guarantee that economic wealth is shared equitably, without economic growth it is simply not possible to have sustained economic betterment for the citizenry of a country.
What is going on in several Eurozone economies cannot be chalked up to a cyclical economic slowdown, or a slow recovery from the 2008 financial crisis, nor is it simply an inevitability of a being a developed economy. The out-performance of virtually every other country on Earth, from larger developed countries to third world countries that have struggled with war, genocide, epidemics, corruption, and revolution disprove this. Greece, Italy, Portugal, and some other Eurozone countries suffer from deep structural problems and some of the most incompetent economic management in the entire world. Perhaps it is time to start holding the self-declared ‘elite’ economic leaders managing the Eurozone accountable to their track record.
As Greece continues to struggle to service its unplayable sovereign debts, it is worth noting that the seven African and Central American countries that have opted to default on their sovereign debts since 2000, have all out grown Greece handedly (with the probable exception of Venezuela). Maybe Greece should take a hint.
|Country Name||Total GDP Growth Since 2000 (Constant Local Currency – Billions)||% GDP Growth Since 2000 (Constant Local Currency)|
|Central African Republic||-20.93||-3%|
|Micronesia, Fed. Sts.||0.01||3%|
|Antigua and Barbuda||0.81||33%|
|St. Vincent and the Grenadines||0.55||45%|
|St. Kitts and Nevis||0.69||48%|
|Iran, Islamic Rep.||783097.55||62%|
|Bosnia and Herzegovina||10.85||65%|
|Trinidad and Tobago||37.90||74%|
|Hong Kong SAR, China||1055.98||76%|
|West Bank and Gaza||3.70||85%|
|United Arab Emirates||663.11||91%|
|Egypt, Arab Rep.||914.39||91%|
|Sao Tome and Principe||2102.32||116%|
|Congo, Dem. Rep.||6331.19||135%|
|Macao SAR, China||246.40||227%|