The unprecedented and prolonged uncertainty period currently prevailing in the Greek economy has frozen investments and keeps unemployment at a very high level, as investors await an agreement with the country’s creditors, the Hellenic Federation of Enterprises (SEV) said in its weekly bulletin.
“Never before in the modern economic history of the country there has been such a prolonged period of dynamic instability as the one currently prevailing in the Greek economy in the last few months. The country is in an unbelievable swirl…the economy is in a downward spiral…the economy is faltering,” SEV said.
The Federation noted that the lack of a clear result in the negotiations with the country’s partners and of a credible outlook for the Greek economy is having a negative impact on economic activity, delaying any investment initiative and the absorption of thousands of unemployed people. Growth policy is absent in the current difficult economic conjuncture, although efforts are made to restore restrictions on competition and deregulating the labor market, the best recipe for deepening the recession. There is also a climate of overtaxing the economy with a planned increase in the tourist industry’s VAT rates that could lead the country to a deeper recession and higher unemployment.
The real estate asset market is in a stalemate as the liquidation of property is impossible without any huge loss. Overtaxation will lead to a shrinking tax base and to an exit of workers and enterprises abroad, SEV noted.