MNI News has an interesting flash headline this morning:
GREECE FISCAL CONSOLIDATION “COMPLETELY DERAILED”: EU SOURCE
This jibes with what we we heard from two different people when we were in Athens last week.
Greece’s extended election process (which saw two separate national elections in just over a month) has done serious damage to all kinds of things.
One member of the Greek business community predicted that the next round of economic data would be “disgusting” as investment and other business activity took another leg down surrounding the vote.
Also as we explained, tax collections generally grind to a halt around elections, and so the extended election has been really bad on this front.
There’s almost no question that in the confusion over the last few months, the government is missing targets on all kinds of fronts, both due to internal paralysis and the bad economy.
The question to watch is whether the Troika (the observers from the EU, ECB, and the IMF who are tasked with making sure that Greece sticks with its reforms) — which is going to visit Greece soon after a government is formed — gives the country some slack, or demands even more aggression to hit this year’s targets.