This simple graph from the Wall Street Journal is just a measure of the constraints that have been imposed to Greece since the beginning of their adjustment. The US depression is just small potatoes compared to Greece.
How many years will be needed for the Greek people to come back to their pre-crisis level? At a 2% growth rate per year it would take about 15 years. In other words, the time for adjustment is around 25 years. This is a generation.
Another question is the positioning of Greece vis à vis its Euro Area partners.
The graph shows the GDP per capita for Greece as percentage of the Euro Area average.
In 2016/2017 it is back to where it was in 1991. It’s another way to see the cost of adjustment for Greek citizens. We have to do what we can to improve their situation and the rescheduling of the Greek public debt is mandatory.
Philippe Waechter – Chief Economist – Ostrum Asset Management