Greece Has Cautious Optimism For Recovery



Greek Finance Minister Yiannis Stournaras says better days are coming
Greek Finance Minister Yiannis Stournaras says better days are coming for Greeks crushed by austerity and debt.

Greek Finance Minister Yiannis Stournaras said Greece’s economy can begin recovering this year if it adheres to the conditions set by its lenders and keeps social unrest down.

“We can make it … if we can stick to the program agreed to with the EU and the IMF. There will be a light showing (at the end of the tunnel),” Stournaras said in an interview with Financial Times.

While many are still anxious about the state of the Greek economy, Prime Minister Antonis Samaras’ government managed to secure 52.2 billion euros in loans as part of the second 130-billion-euro bailout. “We said we would avert Greece’s exit from the euro. Few believed it, but we succeeded,” Samaras said.

Some economic analysts-bloggers, known for their critical stand, agree that more positive signs may be emerging, albeit with caveats. Economics professor Yanis Varoufakis said Greece has been given a much needed reprieve.

“All discussion about being thrown out of the Eurozone is over – at least for now.” But Varoufakis warned the signs of social collapse will remain unless the banking sector is revived. “The stabilization of Greece’s financial markets is in sharp contrast to the continuing tailspin of its social economy,” he said.

The Greek Economist said the way to prompt investment, innovation and the economic environment is by utilizing government programs to revive small-and-medium sized businesses. “(Programs for) businesses active in the manufacturing, tourism, commerce and service sectors comprise a partial initiative of the ministry of development, which aims to strengthen businesses that already exist, new ones and those that are just beginning,” he said.

Financejournalmania agreed, but added that Samaras must aggressively seek foreign investment given the more stable economic environment. “During the next two months he will visit China … Russia, the US, Qatar, so he can balance the privatizations to raise over 2 billion euros from the sell-off of public entities. The administration will sell the public lottery, harbors and public companies such as in the area of natural gas.”

That is not an easy task, countered Michael Haliassos, Chairman of the Macro-Economics and Finance departments at Goethe University in Frankfurt, Germany. “Boosting Greek competitiveness requires attracting dynamic companies and productive workers. Linking pay to productivity, improvements in university and technical education, substantial promotion of entrepreneurship, and encouragement of research and innovation should replace assaults on wages as measures to boost competitiveness,” Haliassos said.

“The road will not be easy, but Samaras’ government has already had important successes and seems genuinely determined to implement all the necessary structural reforms that will allow the Greek economy to develop once again after a long period of stagnation,” Antonis Klapsis, head of research at the Konstandinos Karamanlis Institute for Democracy, told Southeast European Times.

(Reprinted by permission of Southeast European Times, www.setimes.com)

 


5 COMMENTS

  1. “Boosting Greek competitiveness requires attracting dynamic companies
    and productive workers. Linking pay to productivity, improvements in
    university and technical education, substantial promotion of
    entrepreneurship, and encouragement of research and innovation should
    replace assaults on wages as measures to boost competitiveness,”
    Haliassos said.”

    Which is nearly the exact opposite of the measures Syriza advocate. The “solution” of communists is essentially go on a looting binge of the wealthy (just like they did in every other country of the world to such great “success”). In practice this acts as a disincentive to produce wealth. Why work if communist thieves are going to come along and either tax you to death or nationalize your business.They also don’t realize that large businesses are good for an economy.  Large businesses create efficiency due to economies of scale that small businesses typically cannot achieve. This is basic proven economics for 100 years now (e.g. Model T Ford Assembly line) but communists live in a fantasyland of words and self-righteous moralistic finger-waging where they incompetently constantly analogize big business as a negative.

    We need our own Greek owned multinationals like Ikea, Volkswagen, and Samsungs but we have failed to grow our companies to the size necessary to compete on global marketplace because our unproductive welfare queens think they are worth more than they produce (Unlike some of the diaspora Greeks who live in countries that are business friendly who end up having much higher rate of success)

  2. Syriza are nothing but a bunch of Communists and Anarchists. They need to wither on the vine and die!!! Greece needs to this: First: eliminate the burdensome red tape and regulations that prevent economic competitveness. Second: end the Clientalism(Rousfeti) structure and culture that it instills in the country. Third: establish a “Right To Work State”. You should not have to be forced to join a union as a worker if you don’t want to. Reduce collective bargaining and labor strikes. Businesses should be allowed to fire any worker if they’re incompetent and etc… Fourth term limits for politicians and public servants as well as ending public pensions for them. You want to make money as a Public servant, you do it in the private sector not on the public dime. Five: the school and university system should be based on merit not on who you know and your connections. Tenure should be given to professors and teachers who have proven their worth.Advancement should not be based on ideology. Students who have recieved a degree should be able to utilize it and have career in their country. Six: implement a flat tax system. A low corperate rate(lowest in the industrial world) small income tax rate, and a 2%-3% cunsumption tax. Note this rate should be kept permanent. Seven: It should only take about 15 min. to obtain a business license. Just like in Hong Kong. Eight: Protection of private property rights and swift prosecutions of squatters. Nine: The government and the Greek Orthodox church hold property and land they’re not utilizing, which by the way is very fertile and valuable. It should be sold off to Greeks citizens and businesses that will use the land more productively. Ten:Encouragement of multinational companies and homegrown Greek start ups to set up shop in the country. This will boost Productivity in Greece. Expansion of the tech industry is a must. And finally full exploitation of untapped oil reserves in the Ionian and Aegean seas. As well as expanding the mining of the gold fields which Greece has in abundance. If the country taps into these key resources Greece will become an extremely wealthy society. She will be able pay off her debts with interest and be on even more solid ground. In conclusion Greece has enormous potential. Greece should be like this: Lean mean public sector, with no corruption, that has a balanced budget. And a much larger, diverse, competitive private sector, run by productive workers. Get cracking Greece. Don’t listen to the lies of that idiot Marxist Alexis Tsipras.

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  4. Thank you Alex. We need common sense in Greece not Socialism and Ideologues like Alexis Tsipras. If he wants that he could move to Cuba. Communist Pig!!!!