It seems too ridiculous to be true but here at the margins of the EU Summit, European leaders are actually claiming that their strategy is working: Never mind the fact that the European economy is back in recession and that unemployment is sky rocketing, the recovery of export dynamics in some member states is seen as a measure of great success by our ‘very serious leaders’.
In particular, much is being made of the fact that exports statistics from Greece indicate a substantial increase since 2009. This is supposed to demonstrate the benefits of the ‘internal devaluation’ policy imposed by the Troika with wages and unit wage costs collapsing. It’s therefore interesting to examine Greece export figures in greater detail.
First, when looking at the volume of goods exports and basing ourselves on the AMECO database, there’s hardly any sign of this famously strong recovery of Greek exports. In 2008, Greece was exporting some 22 billion worth of goods (in prices of 2005). The volume of goods exports collapsed to 19 billion in the 2009 financial crisis and has recovered slowly to 21 billion in 2012. No export miracle here.
Something does seem to be happening when switching the focus to goods exports in current prices. These increased from 22 billion before the outbreak of the crisis to 26, 5 billion in 2012, representing an expansion of 20%.
To examine what is behind this surge in the statistics, the figure below shows the product composition of exports from Greece from 1999 to countries outside the EU-27. (We also produced a figure on Greek exports to the EU 27 but all the curbs were flat).
This chart indicates that one product group above all was responsible for this increase in goods exports, namely the group ‘mineral fuels, lubricants and related materials’, which made a sudden leap to 6 times its previous level, increasing by €5 billion, an amount corresponding to the overall increase of goods exports from Greece (see paragraph above).
This is a bizarre finding, for two reasons. What is striking about this particular group is that it mainly contains products that are highly capital – and material – intensive (coal, petroleum, gas, electric current). Labour cost cuts are therefore the least likely explanation for this sudden surge in exports. Moreover, the surge in exports of this product group from Greece is limited to the rest of the world. There is no increase in these exports to European markets.
An explanation for this riddle can be found in a note from the Greek statistical office, the Hellenic Statistical Authority, Press release, ‘Commercial transactions of Greece (Estimations: August 2012’, October 10th). The note says the following: “Data on trade in petroleum products are not included due to a revision under way of the respective time series. The revision aims to incorporate revised primary data that have been recently provided by the Customs Authority”.
In other words, what may very well be responsible for much or this entire surge in Greek exports are ‘revised primary data’, i.e. simply a difference in counting.
To conclude, if the wage austerians are now basing their case on statistical corrections instead on hard data, they must be getting pretty desperate.