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Citibank forecasts another debt haircut

03 April 2013 / 13:04:30  GRReporter
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The road to the new restructuring of Greece's debt is now open as stated by Angelos Kalipolitis, Head of Investment Research and Advice at Citi Private Bank. According to the financial expert, the country will once again be able to reduce its public debt, but this time official lenders (Official Sector Involvement - OSI) will suffer, namely the central banks of euro zone countries that have granted support loans to Greece since the beginning of the crisis. Private financial analysts estimate that Greece will return to economic growth in 2016 rather than in 2014 as provided by the government.

These forecasts seriously embarrass the financial observers in the country, who had expected that the stabilization of the Greek economy would stop the ever-growing unemployment. The country has lost 507,000 jobs over the past five years, which, according to a study carried out by the research institute of the union of private sector workers (GSEE), are the additional jobs that were created in the period 2001-2008. The same study shows that the rate of long-term unemployed or of those who remain outside the labour market for more than a year is 39%.

Although the total number of unemployed in Greece is approaching 1.3 million, only one in five unemployed persons receives a social benefit of 320 euro. 60% of unemployed people are in the age group between 30 and 55 years. 92% of the people registered with the labour offices are of Greek descent, 6% come from third countries outside Europe and only 2% of the registered unemployed people in Greece come from member states of the European Union.
 
Meanwhile, Greece continues to struggle to implement the conditions set in the Memorandum of financial support. On Thursday, 4 April, the mission of the supervisory Troika will return to Athens to examine the progress of reforms.

Two weeks ago, the talks between the lenders and the government concerning the reduction of the number of public workers and the payment of the inhabited house duty reached an impasse. The supervisors from the International Monetary Fund, the European Central Bank and the European Commission will return to Athens to examine the alternative proposals of the government to save public money. The agreement between the two parties will determine the payment of two tranches of financial assistance totalling 8.8 billion euro.
 
Minister of Administrative Reform Antonis Manitakis has announced that the current programme will reduce the number of public workers in Greece by 180,000 by 2015. Under the original plan, the number of jobs in the public sector should have been reduced by 150,000. Instead of making the cuts planned, the government is tending to trigger the option of early retirement of public officials to avoid direct layoffs, which will provoke the violent response of the trade union forces. According to Minister Manitakis, the mass retirement of public workers will further intensify the problems of pension funds, which already have serious deficiencies.

 

Tags: EconomyMarketsCrisisUneploymentExternal debtGreece
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