According
to the office of the budget (OB) of the Hellenic Parliament, and published by
the Greek daily newspaper, Kathimerini, there are six risks within the Greek
economy. In its quarterly report, the OB sees risks ahead which are hurdles and
the future road to growth is made up of obstacles.
The
biggest problems are the public debt and the pension system, which the OB
considers as non-sustainable, while high taxation and contributions (to pension
funds, taxes, property taxes, etc…) are recessionary measures. The OB points
out that the target set for the primary surplus in the budget must be reduced
after 2018, while in terms of the state reforms that have been set by the
memorandum, it sees political tricks towards implementing them!!
As
far as the labor changes that the government is asked to implement, in the
upcoming fall of 2016, the OB states that thus far no government has provided
more protection - security for the labor force, and has set obstacles for
business flexibility, a priority for their growth. While the government’s
protection of the status quo in the labor market is a dead end policy, and does
not bring about the necessary reforms, it can create a secure environment for
the labor force.
High
taxation not only are recessionary measures, but sets barriers to achieving
fiscal targets. The OB reiterates that the deficit as well as the pension
reform are non – sustainable, and is asking for the implementation of lower
surpluses for fiscal 2019 and 2020 to levels which range between 1 to 2% of
GNP, and lower than 3.5%.
The
do not foresee the Greek economy to recover due to obstacles set, and the
mixture of economic policies. Some of the components of GNP, such as exports,
consumption and investments are on downhill for the first six months of 2016.
Meantime
the wave of changes in the banking system continues with changes set by the
memorandum in the top management of the Greek banks. For starters, the lenders
began three weeks ago when they changed the management of the shareholder of the
Greek banks, the Single Supervisory System (SSM).
Yesterday
another high executive announced his resignation from the Bank of Piraeus,
after leading the bank for 25 years and also its founder. Mr. Sallas took the
bank form 0.1% market share to 30% today. By the end of September will follow
the resignation of the head of the National Bank. See prior articles for more
details.
Bill
T. Alexandratos, MSc. BA
Finance
