History of a crisis in one graph

The Greek crisis can best be followed by looking at the attached Figure that shows total deposits of households and non-financial corporations.

There were 3 phases in the crisis. The first, from the start of the crisis at the end of 2009, when Eurostat criticized Greece for under-estimating the Government deficit, and the Greek government requested for EU/IMF/ECB assistance in May 2010, up to June 2012 when the Samaras government takes charge with a second stabilization/aid program and with a large part of the Eurozone institutions in place to support countries in financial distress. During this period, total deposits decreased by 83.6 Billion Euros, at a rate of 2.8 Billion Euros per month. While the losses in the first half of this phase were largely due to the difficulties of stabilizing the economy and the successive delays in building an institutional framework to assist crisis countries, the second half was deeply marked by the protracted sovereign debt restructuring process and the fear of financial losses by economic agents. Simultaneously, the statements by policymakers of a Grexit had a large influence in expectations.

The second phase, from June 2012  to December 2014. Total deposits recovered slightly, in a total of 8.7 Billion Euros, and the economy was in a path of recovery by the second half of 2014.

The third phase, that started with the failure to elect the President and the general elections that led Syriza to power. The renewed fears of Grexit, failure to agree on the conclusion of the second program and the inability to instill confidence in the banking system led to a loss of deposits without precedent. From December 2014 to mid-June 2014 we estimate a total loss of 37.8 Billion Euros, at a monthly rate of 6.3 Billion Euros, more than double the speed of the first phase.

In total, Greece has lost 118.5 Billion Euros, almost half the amount it had in January 2009.

This is what distinguishes Greece from the other crisis countries: Ireland, Portugal and Spain.

To see the Figure press hereFigure Dep Greece