Stouraras: The Greek economy is at a turning point

Wednesday, May 17th, 2017
Last Update: 22:53

“The Greek economy is at a turning point,” Yannis Stournaras, head of the Greek central bank, told POLITICO in an interview. “I am more optimistic now, but … cautiously optimistic, given the mistakes that have often been made in the past both by the Greek side and by Greece’s creditors.”Ahead of next week’s eurozone ministerial gathering in Brussels, the Greek parliament on Thursday will vote on the latest set of reform measures that will clear the way for the conclusion of the creditors’ “second review” of the bailout package. The Greeks hope that this will then pave the way for an agreement on debt relief and more fiscal leeway, at last putting the country on a path to normality — even as transport workers, doctors, and civil servants opposed to further austerity went on a nationwide strike on Wednesday.

Last week, Greek Prime Minister Alexis Tsipras said Greece is “closer than ever” to reaching a deal on debt relief. “The solution has to do mainly with our lenders’ clear obligation. Τhe ball is no longer in our court.”

The uncertainty is the last thing Greece needs right now, said Elias Kikilias, head of research at the National Center for Social Research. “If the political leadership in Greece, as well as the creditors, will offer a period of steadiness, then all conditions are in place for the Greek economy to growth 2 to 3 percent a year in the years ahead.”

Time and again, political uncertainty has held back Greece’s economic recovery. The latest delay in bailout talks prompted the European Commission to make a sharp downward revision in its growth projections for this year to 2.1 percent from 2.7 percent previously. The Greek government has cut them deeper, to 1.8 percent. And its first quarter GDP figure, released earlier this week, showed the economy contracting 0.1 percent from the previous quarter.

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