The Financial Times highlights the country’s great turnaround from the brink of bankruptcy and exiting the eurozone, reaching today the threshold of investment grade

In their article on the progress of the Greek economy, the Financial Times highlights the great turnaround that the country recorded from the brink of bankruptcy and the exit from the Eurozone, reaching today the threshold of the investment grade.

In the report of the British newspaper, signed by journalist and author Eleni Varvitsiotis and editors in Brussels and London, it is emphasized that after the change of Greece’s outlook to “positive” by Standard & Poor’s in April, many – like the central banker Yiannis Stournaras – they expect the country to regain investment grade after the completion of this year’s election procedures. This will be conditional on the new government continuing to reform and maintaining political stability.

At the same time, it is emphasized that although New Democracy maintains a lead of five to six percentage points over SYRIZA, which is still described as a “party of the radical Left”, no government will emerge after the and there will be a new contest in early July.

The newspaper hosts, among other things, the statements of the executive director of Eurobank, Fokion Karavias, who comments that the return of the country to the investment level will constitute “the biggest change in the European economic system”, to add: “After all, nothing is impossible”.

The report cites a series of official economic data for Greece, emphasizing that “after many years as the problem child of Europe”, the country marked one of the strongest recovery processes after the pandemic, with the comment of foreign houses, such as Goldman Sachs, that Greece will continue to outperform the eurozone average this year and in 2024.

The contribution of critical sectors of the economy to its recovery is highlighted, such as tourism (reported to have reached 97% of the record year 2019), exports and construction activity.

Also included is the opinion of the Deputy Minister of Finance during Prime Minister Alexis Tsipras, Giorgos Chouliarakis, who as an adviser to Mr. Stournaras states that “it will take another decade” for Greece to return its gross national product to the highest point of the previous decade, and that “only a serious multi-year investment plan in human capital, basic infrastructure and health services” will boost wages.

And Nikos Vettas, general director of IOBE, is quoted as commenting that “many households feel pressure from the rise in the prices of food, energy and other basic goods”.

The economic turnaround was also partly built on the large cut in wages, the article comments, with Bank of Greece economist Dimitris Malliaropoulos commenting that “the price of this improvement was high”, but also that “the economic activity that was in the dark now exposed and taxed,” thanks to the electronic payments the pandemic bequeathed to the economy.

Also included is Legal & General Investment Management executive Chris Jeffrey’s view that Greece benefited in the inflationary context from the fact that it is one of the countries with incomes that boost inflation while not having so many liabilities that affect global price rises , given its debt profile which has an average maturity of 20 years, compared to seven years for developed countries.

“Greece’s nominal GDP has risen over 25% in the last two years, when its nominal debt rose only 4%,” Mr. Jeffrey points out, predicting a further improvement this year that will also bring a return to investment grade.

Source: Financial Times

Editor: Money Review