The economic situation in Greece has deteriorated – The World

The economic situation has deteriorated sharply in Greece since the beginning of the year, with most lights red (growth, deficits, debt and inflation), according to economic forecasts of the European Commission published Tuesday, May 5 Growth is expected to be only 0.5% this year, down sharply from the previous forecast in February, when the European Commission was counting on 2.5%.

The Greek government, led since the end of January by the radical left of the Premier, Alexis Tsipras, expects growth of 2.9% this year. But the Greek economy, which had rebounded in the middle of last year, contracted again in late 2014. “The positive momentum was broken by uncertainty since the announcement of early elections in December, “ highlights the European Commission, for which ” the current lack of clarity “ on the policy vis-à-vis government creditors (European Union Funds International Monetary) “made worse”

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The investment worth

If growth should be supported this year by consumption, tourism and the marine industry, the investment is the penalty, in a climate of deteriorating confidence, explains the EU executive. The situation also deteriorated on the forehead of public finances: the European Commission forecasts a deficit of 2.1% this year and 2.2% in 2016. There are just three months, she expected a surplus of 1 , 1% and 1.6%.

The Greek debt, already the highest in the euro area is also expected to explode to 180.2% this year, before flowing back slightly to 173 5% in 2016. In February, the European Commission foresaw a debt to 170.2% in 2015 and 159.2% next year.

Caution IMF

The yield on Greek government bonds is also rising again Tuesday because of an article in the Financial Times that the International Monetary Fund (IMF) may withdraw its financial support to Greece if its European partners would not accept a new partial erasure of the Greek debt. The newspaper said the warning was launched by the head of the IMF’s European, Poul Thomsen, the finance ministers of the euro area in the last Eurogroup meeting at the end of April in Latvia.

This warning would be based on data indicating that the budget surplus for Greece could turn into a deficit this year, thus aggravating the difficulties of the country to the edge of default. This perspective means that the aid for Greece, still not released, might not be sufficient. The Greek government is engaged in tough negotiations with its creditors, including the IMF and the countries of the euro zone, on socio-economic reforms in exchange for the payment of aid.

The German finance minister “skeptical”

The German finance minister, Wolfgang Schäuble, has also expressed his pessimism Tuesday saying is “skeptical” on the odds an agreement in the coming days between Greece and the institutions of this financial assistance. “We do not speculate on a” Grexit “[a Greek exit from the euro zone], because we do not want” , insisted Mr. Schäuble, speaking to an audience of foreign journalists. “But that does not mean that we are ready for anything, it was perhaps a false premise of Athens” , he added.

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