On January 31, Prime Minister Lucas Papademos presented to his European Union counterparts at the European Council in Brussels a selection of graphs and economic data displaying the progress that the Greek economy has made in some areas since 2009.
Within two years, 2010-11, Greece managed to regain over 50 percent of the competitiveness lost between 2000 and 2009. From 2009 to 2011, the real effective exchange rate (vis-a-vis its 26 EU trade partners), as measured by unit labor costs, fell from 114.9 to 107.4 index points.
Current account deficit decreasing
The current account deficit fell from 15 percent of GDP in 2008 to 9.4 percent in 2011.
The deficit reduction is even more significant if the oil trade balance and the general government interest payments are excluded: In this case the deficit in 2011 was around 0 percent of GDP, down from 6 percent in 2008.
This also demonstrates the burden of the debt servicing cost.
General government deficit and primary deficit shrinking
Despite the steep recession, the Greek government managed to drastically reduce the budget deficit. According to the latest Eurostat and troika data, the budget deficit in 2011 had declined by 6.5 percentage points since 2009. More specifically, there was a significant reduction in the general government deficit: from 15.8 percent of GDP in 2009 to 9.3 percent in 2011.
The budget deficit reduction is even more impressive if one looks at the primary budget deficit (i.e. excluding the cost of interest payments on the public debt), which fell from 10.6 percent of GDP in 2009 to 2.4 percent in 2011. This means that in just two years the primary deficit decreased by 8.2 percent of GDP, i.e. approximately 19 billion euros.