Jakarta Globe – AFP, Sep 01, 2014
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| A visitor prepares to enter the entrance to the construction site for the new Panepistimio metro station, operated by Attiko Metro, and part developed by Aegek, in Thessaloniki, Greece, on Aug. 29, 2014. (Bloomberg Photo/ Konstantinos Tsakalidis) |
Athens. The
Greek economy, in recession for six years, shrank again in the second quarter
of this year, but by only 0.3 percent, revised data showed on Monday.
The revised
outcome from the statistics office Elstat was slightly worse than an initial
estimate of minus 0.2 percent, but shows that the downturn is running out of
steam, notably since the third quarter of last year.
The
government forecasts that from now on the economy will show slight quarterly
growth, and that the outcome for the whole of 2014 will be growth of 0.6
percent.
That would
mark a a big step away from the national disaster of deep bankruptcy and rescue
by the International Monetary Fund and European Union which came close to
triggering a break-up of the euro zone.
In exchange
for loans totaling more than 240 billion euros ($315 billion), the country has
applied deep, and highly unpopular, reforms and cuts to pay and pensions to
correct its public finances.
Reforms
continue in order to improve tax collection and make the economy more efficient
and exports more competitive.
The
underlying state of the economy is slowly recovering as the second bailout
program approaches the end of its term in December when the country will be
expected to have regained sufficient confidence on financial markets to be able
to borrow normally.
Borrowing
rates for euro zone countries, and notably those in deep difficulties, have
fallen sharply in the last year and particularly in the last few weeks.
This is
first because the ECB said it would help countries by buying their debt bonds,
on tough terms, and more recently because the bank has signaled it may inject
huge amounts of cash into the economy to ward off deflation.
The state
of national finances and progress of reforms are still under close supervision
by the IMF, EU and European Central Bank.
New audit
in sight
On Tuesday
Finance Minister Guikas Hardouvelis and about 10 other ministers and senior
officials are to begin three days of talks in Paris with these three creditor
bodies, known as the Troika
The Greek
government hopes that this auditing working session will be an opportunity for
it to begin talks on reducing the debt burden by means of a debt restructuring,
meaning reduction of the interest rate payable and of the length of the loans.
After a
first such restructuring in 2012, the debt amounted to 318 billion euros, or
175.1 percent of gross domestic product. Most of this is held by the IMF, the
EU and ECB.
But the
European Commission holds that the talks in Paris are intended merely to
prepare for the full routine audit in Athens in September.
If it finds
that finances and reforms are in line with targets, it would release the last
installment of EU loans of about 2.0 billion euros.
The last
such audit at the end of June led the EU to release about 1.0 billion euros,
although this followed several months of difficult negotiations.
Greece is
committed to axing the jobs of 6,500 civil servants by the end of the year
having already put about 20,000 public service workers on short-time working by
either merging or abolishing public bodies.
The
European Central Bank is also concerned about a shortage of funding available
to businesses, and also to banks which are weighed down by bad loans.
Agence France-Presse
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