Greece Has Cautious Optimism For Recovery

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)