Staikouras: Greece is entering a trajectory of high, long-term development

by

The continuation of the implementation of a prudent and responsible economic policy, the continuation of society’s support to the above-mentioned challenges with targeted measures, within the framework of budget forecasts, as well as the continuation of reforms, structural changes and restructuring are urgently needed. . This was stated, among other things, by the Minister of Finance Christos Staikouras in his speech at “The World Ahead 2022- Athens Gala Dinner” Economist. He stressed that the government, with its strategy and policies, looks forward to the integration of the Greek economy in the modern and dynamic economies of Europe, and to the overall strengthening of the country. And this, he added, will be achieved with the contribution of all political and social forces.

In particular, the minister initially gave a brief overview of the course of the Greek economy and its prospects for the current year, but also the coming years, saying that the course and prospects inspire optimism, despite the veil of liquidity, uncertainty and difficulties. caused by the geopolitical, pandemic and energy crises, at global and European level.

As he stated, “Greece recovered in 2021 almost all the losses of 2020, due to the pandemic, and is entering a trajectory of high, long-term growth. The recovery of the Greek economy, “type V”, exceeded, as everything shows, the forecasts, and is expected to be the second largest in the eurozone. The Winter Forecast, announced by the European Commission last Thursday, confirms this. In addition, it is predicted that this strong recovery will be followed by high and sustainable growth, both this year and in the coming years. The forecasts show that our country is expected to achieve the second highest-cumulative- growth in the three years 2021-2023 “.

The Minister then referred to a series of macroeconomic figures and indicators that reflect the dynamics of the Greek economy:

1. “The increase in Gross Domestic Product is mainly based on investments and exports. International investment groups are “tied” to our country, giving a resounding vote of confidence in its present and future. Overall, investment is the 2nd largest increase in the euro area. And exports are at a historically high level. Investments and extroversion that create jobs and incomes, while giving sustainability to economic growth.

2. The disposable income of households is supported. In the first 9 months of 2021, this was an increase of 3.5 billion euros compared to 2019, according to ELSTAT. Moreover, according to the recent relevant report of the European Central Bank, the real disposable income of Greek households in the 3rd quarter of 2021, ie income taking into account inflation, showed an annual increase of 4.7%. This is the second largest increase in the eurozone, six times above the European average. These figures converge with those recently published by both ELSTAT and the OECD. In fact, according to the OECD, the real per capita income of Greek households showed the second largest annual increase among its member states.

Of course, we fully understand that the significant rise in inflation in recent months is “gnawing” on disposable household income. However, the impact of inflationary pressures is mitigating due to the previous increase in disposable income, which was a result of tax and insurance tax cuts and the generous society support measures designed and implemented by the government.

3. Unemployment is falling. Greece presents the best European performance in the health crisis. The government interventions of the last two years have eliminated the – in fact – risk of mass “padlocks” and dismissals.

The above-mentioned report of the European Central Bank shows that our country has achieved the largest reduction in unemployment in the euro area in the last four years, as a result of which it is no longer the country with the highest European unemployment rate. Today, the number of unemployed is at the level of 2010.

4. Household and business deposits are strengthened. They are increased by 43 billion euros compared to June 2019, with 52% of the increase coming from households.

5. The turnover of companies in 2021, according to current data of ELSTAT, was increased by 15.5 billion euros compared to 2019, a figure that reflects not only the resilience of Greek companies in the midst of a pandemic, but also the dynamics which they have acquired thanks to their adaptability and the generous state support that has been provided to them throughout this difficult period.

“In January, the economic climate index was at its highest point in 21 years, exceeding the European average.”

According to Mr. Staikouras, the positive dynamics of the Greek economy is also reflected in the declared recognition by partners, international institutions, rating agencies and investors, thanks to the implementation of a prudent, methodical, reformist and far-sighted fiscal policy. “A policy that has been adapted immediately and effectively to the emergencies of multiple crises. A policy that kept society and the economy afloat, with measures totaling about 44 billion euros, to tackle the economic effects of the pandemic. A policy that immediately mobilized short-term interventions to deal with the effects of the energy crisis and the consequent price increases, with measures totaling 2.1 billion euros to date. “Support that will continue, for as long as needed,” he noted.

Analyzing the aforementioned policy, the minister said that it:

-support the middle class and the weak layers,

-lighten the citizens from the high tax burdens,

-movered incentives for investment and employment,

-promoted structural reforms and privatizations,

-strengthened the credibility, prestige and credit rating of the country,

-utilize fiscal flexibility, without derailment,

– seize the opportunities of the time, such as the Recovery Fund,

-maintain a healthy and safe state fund,

-created fiscal space for further interventions to support society, such as the permanent, further, reduction of ENFIA by 350 million euros from this year and the double increase of the minimum wage this year,

-reduce non-performing loans,

– has consistently achieved negative borrowing costs in the money markets and low borrowing costs in the capital markets, taking into account the conditions prevailing internationally lately,

-improved the competitiveness of the Greek economy.

However, he added, “as a government and as a financial staff, we are not celebrating or complaining.” We are – he said – fully aware of the fact that, despite the promising “big picture”, the “photo of the moment” has “shadows”, due to significant difficulties and challenges. Difficulties and challenges of endogenous and exogenous origin. On the one hand, the country has a sustainable public debt, as recognized in all European decisions and assessments, but this is particularly high. Greece showed a high primary deficit, in order – and rightly so – to form an adequate “safety net” for society and the economy. The country is still the only one in Europe, under enhanced surveillance, and has no investment grade. At European level, on the other hand, monetary and fiscal policy will gradually become more restrictive. “The lack of investment level, in the environment of uncertainty that prevails lately regarding the monetary policy in Europe, is the reason that makes the yields of Greek bonds more sensitive to international volatility,” he said.

And of course, he added, “we continue to face the challenges of pandemics, the energy crisis and inflation, the climate crisis and the green transition, as well as old and new geopolitical challenges.”

Therefore, he concluded, “the continuation of the implementation of a prudent and responsible economic policy, the continuation of society’s support to the aforementioned challenges, but with targeted measures, within the framework of budget forecasts, as well as the continuation of reforms, structural changes and privatizations, are an insurmountable need “.

He then reiterated the 8 key priorities in economic policy:

1. Maintaining high rates of economic growth in the coming years.

2. Further improve the composition of GDP, with a significant increase in investment and exports.

3. Exit of the country from the status of Enhanced Supervision, in 2022. In this direction, he said, “we are successfully completing the periodic evaluations of the European institutions, having already raised this issue at European level”.

4. Achieving a single-digit percentage of non-performing loans in the portfolios of Greek banks, within 2022. From 2021, two systemic banking institutions achieved a single-digit percentage, he noted.

5. Significant fiscal improvement in 2022 and achievement of realistic primary surpluses, driven by high growth, from 2023.

6. Acquisition of investment grade, in 2023.

7. Strengthen liquidity in the real economy by implementing policies such as reducing “red” loans in bank portfolios, utilizing the € 12.7 billion Recovery Fund loan portfolio, and the new regulatory framework of private debt.

8. Rational utilization of available European funds, with the “peak” the Recovery and Resilience Fund and the new NSRF, totaling about 80 billion euros by 2027. Already, 103 projects, with a budget of over 6 billion euros, have joined at the Fund. Projects, as he stressed, that improve the daily life and quality of life of citizens, as they concern areas such as Health, Education, Research and Innovation, the improvement of public services, tackling climate change, Energy, Infrastructure and Transport, Justice, Culture, Agri-food, etc.

The country, he said, has received the highest pre-financing in Europe and has submitted its first payment request. “While business agreements have been signed with credit institutions and international banking institutions (EIB, EBRD), for the utilization of the loan portfolio of the Fund. He added that the subsidies of the Recovery and Resilience Fund are expected to be absorbed in Greece by at least 38% in investments and reforms with a “green” sign “.

Concluding his speech, the Minister said that “we continue the demanding, upward path, so that the positive” big picture “of the economy and its auspicious prospects are justified, as soon as possible, offering households and businesses the benefits of high, sustainable and socially equitable development, starting this year “.

Follow Skai.gr on Google News
and be the first to know all the news

You May Also Like

Recommended for you