Clutching at straws: Europe's never-ending delusion feeds on Greece's unexpected 'growth'

Did you hear the latest? Greece’s economy grew by 0.8% in the first quarter of 2011. This is, surely, good news. Except that, in fact, the Greek economy shrank by 4.6% in the first quarter of 2011.

Confused? You should not be. “Lies, damned lies and statistics” was a phrase invented long before Greek statistics rose to prominence. It refers to the simple fact that if one looks at the data partially, the data will give one a partial, utterly misleading, picture.

In this particular case, what happened was that December of 2010 was a month when Athens was paralysed by strikes. The city centre and major shopping areas were closed for half the month, yielding a drop in commercial activity of more than 60%. Thus, compared with that abysmal fourth quarter of 2010, the first quarter of 2011 was marginally better. Which means, it was perfectly catastrophic!

Indeed, the official data shows that, compared to the first quarter of 2010, the Greek economy shrank by 4.6%. By the standards of any modern economy, this is a shattering datum. That the European Union should clutch at this straw as ‘evidence’ of improvement, as a ray of light, is testimony to the combination of desperation and disingenuousness which typifies Europe.


  • I’ll leave my comment in Greek:

    Ποδοσφαιρικά πέσαμε από την Α’ Εθνική στο τοπικό ερασιτεχνικό λόγω χρεών και πανηγυρίζουμε για την άνοδο στο περιφερειακό πρωτάθλημα.

  • “Indeed, the official data shows that, compared to the first quarter of 2011, the Greek economy shrank by 4.6%”

    You meen the first quarter of 2011 compared to the first quarter of 2010?

  • I think you are being wrong here. Bear in mind that the data on which this report is based are **seasonally adjusted**. Most sophisticated deseasonalization filters contain provisions against outliers, that is, extreme fluctuations due to rare events (such as strikes). Hence it does not particularly matter what happened on December 2010. The filters extract stochastic cycles from the series by utilizing statistical control principles which ensure **robustness**.

    Furthermore the 4.6% contraction is a backward looking piece of information. It means that the economy has shrunk by 4.8% (we knew that already: 3 quarters of info already availabe) – not that it is being shrinking.

  • κ. Βαρουφάκη,

    Ποια η γνώμη σας για τους “Ευρωπαίους οικονομολόγους για μια εναλλακτική οικονομική πολιτική στην Ευρώπη”;
    Το τελευταίο υπόμνημά τους:

    Οι προτάσεις τους είναι μακριά από το δικό σας modest proposal;

  • I guess it is better to post my comment in English too:
    The question is what Mr. Varoufakis thinks about the “European Economists for an Alternative Economic Policy in Europe (the EuroMemo Group)”

    Are their proposals far from the “modest proposal”?

    Obviously the point is “united we stand”…

    Keep up the good work and may I add a little criticism: Perhaps you address too much to the European leaders and not to the peoples of Europe.

    • I shall have to write a piece on my sympathies for and disagreements with the euromemorandum. As for your criticism, you may be right. The trick is to do both: to address our leaders in a manner that empowers the people to become more critical of their leaders.