Greek Prime Minister Antonis Samaras’ prediction that the country’s staggering economic crisis will start to abate and that a slow recovery will begin next year seems like, the country’s international debt inspectors said, but the record 27 percent unemployment rate will take years to come down and will probably stay above 20 percent for three more years.
Raining on Samaras’ parade while he was in China selling the Chinese that he’s engineering a “success story,” a report from the European Commission after a second bailout of $173 billion runs out that Greece will be on its own and hope to woo investors from the markets, although a previous government burned them for 74 percent losses in a desperate bid to write down the country’s staggering debt.
The report cited progress by Greece’s year-old coalition government in reforming the economy and public finances, but warned against complacency. “The implementation of wide-ranging structural reforms remains the prerequisite for stabilizing the economy and laying the foundations for economic growth … further efforts are needed.”
While the government has said it aims to resume borrowing from bond markets in early 2014, a European Union official involved in the Greek bailout told AP that Athens was only likely to regain “partial market access, possibly next year.”
Stringent budget austerity measures — including relentless pay and benefit cuts — have slashed high deficits but also hurt economic growth. Unemployment has reached 27 percent, with a staggering 64 percent of those aged 15-24 are without a job.
The Commission estimates that Greece’s economy, after contracting 4.2 percent in 2013, will next year grow for the first time since 2008, by 0.6 percent. It warned, however, the recovery remains fragile.
“Should product and services market reforms not accelerate as foreseen under the program, positive economic growth could not return in 2014 as foreseen,” it said in its report, which was based on data by representatives of Greece’s debt inspectors — the Commission, IMF and European Central bank.
“A failure to implement these reforms in time would thus amplify the social distress coming from very high unemployment and from the pressure exerted on the population by the prolonged recession and the wide-ranging economic and social adjustment.”
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