Greek economy on the mend; growth expected as economic sentiment rises

Greek economy on the mend; growth expected as economic sentiment rises

 

By Lefteris Yallouros – Athens

Greek Prime Minister Antonis Samaras highlighted recent achievements in the economy at the opening of “Posidonia 2014” in Athens, the world’s most prestigious shipping exhibition with an estimated 19,000 visitors from a record 93 countries.

The Greek premier pointed out strides made towards economic recovery provide a guarantee of stability for foreign investors interested in Greece.

“We need foreign investment to upgrade our port infrastructures and our land transport networks from there on. We also need investment to renovate our shipyards. We need investment to emerge as a regional energy hub, taking advantage of our energy resources in the sea area around us” Samaras said in his address.

The PMs optimistic speech came just a few hours after the EU Commission published a report predicting 0.6% growth for Greece in 2014, citing the revitalization of Greek exports and income from tourism and shipping.

The reports urges Greece to continue to implement its convergence program and fully comply with fiscal targets and structural reforms while seeking spending cuts in the labor, social security and health sectors.

Speedier privatizations, more effective tax-collection and anti-corruption systems and the implementation of a series of structural reforms, are also deemed vital towards boosting competitiveness.

“The authorities remain committed to taking all necessary actions to ensure that banks are adequately capitalized and are in a position to support the economic recovery,” the report adds.

A report by the Foundation for Economic and Industrial research (IOBE) released Monday also cited positive signs in the country’s economy.

The country’s finances are now entering a phase of stabilization as the Economic Sentiment Index and the Consumer Confidence Index compiled by IOBE showed a new six-year and four-year high respectively last month as manufacturing returns to growth.

The Greek government is hoping to capitalize on the signs of recovery to deliver debt relief as part of a deal with EU counterparts when talks are officially launched in the autumn.

Finance Minister Yannis Stournaras, who has developed a good working relationship with the troika and is trusted by the country’s lenders, has played an instrumental role towards reaching fiscal and structural goals. As the PM looks set to carry out an extensive cabinet reshuffle soon, replacing Stournaras would be a difficult task with Samaras reportedly contemplating assuming the post of FinMin himself. Reports in Greece suggest Stournaras is likely to be appointed Bank of Greece Governor.