The debt relief measures the Greek government is trying to achieve will not suffice to bring investors, says the Hellenic Federation of Enterprises (SEV) weekly newsletter.
The SEV newsletter points out that the short term debt easing measures European creditors have decided on are insignificant, while it forecasts that the International Monetary Fund will not participate financially in the bailout program. However, the IMF will continue to assess the Greek economy since it has lent 32.1 billion euros to Greece.
Furthermore, the newsletter says, the elections in France and Germany are used as pretexts for the delays in discussing the Greek debt issue.
“Let’s not kid ourselves; without a clear commitment and support with actions, we cannot say we want to attract investments in Greece, and not send our businesses abroad or sell them out. Without investments it will be extremely difficult to exit the crisis and enter a growth trajectory,” the SEV newsletter continues.
The short-term debt adjustment measures to be implemented in the period after completion of the first evaluation (technically will probably close on 24/10/2016 )until completion of the program in mid-2018 are insignificant.
The medium-term period that starts after the successful completion of the program, includes some of the measures proposed by the IMF, if needed, so that long-term gross financing needs remain at a level consistent with debt sustainability, as will be assessed then.
Finally, for the long-term period, the Eurogroup agreed on an ad hoc debt regulation mechanism in the case where the debt is evolving under unfavorable sustainability scenarios, including any additional measures in response to those envisaged in the medium period, the analysis continues.
In any case, the decision of the Eurogroup acknowledged that it is almost impossible to take more concrete measures here and now, as the IMF wants, as it is impossible to predict the distant future.
SEV forecasts that in the end the Eurogroup decision will prevail, contrary to the IMF. Europe, of course, would assume the risk of the IMF not contributing financially to the program, but this is minor in the big picture. In any case, the IMF will continue to evaluate the Greek economy since it has already lent the country 32.1 billion euros in the first two bailout Memoranda compared to 194.8 billion euros the European institutions have lent.
Regarding the second bailout program evaluation, its rapid completion will be a positive step to build the credibility needed so that international markets begin to trust Greece, creating favorable conditions for an economic upturn. Only then will the country attract the investments necessary for the rapid growth of income and employment and the exit from the crisis.
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