The fiscal consolidation programme has failed to stabilize the Greek economy, reads the latest European Commission report on it its progress, which was released in Brussels today.
According to a senior official of the European Union, who presented its results, this has created the basis for economic growth which is expected to be around 0.6% in 2014, 2.9% in 2015 and 3.7% in 2016. At the same time, he said unemployment is about to begin to decline this year and, according to Brussels, Greece is already creating new jobs.
The European official stressed that Athens has been able to achieve impressive results in terms of fiscal consolidation since it has more than fulfilled the objectives for 2013 with a budget surplus of 1.5 billion euro (0.8% of GDP).
He also pointed out that the Greek banks are stable and after being successfully recapitalised, the majority of them are already turning to private capital. In this connection, he stated that the money provided for that purpose by the European mechanism for financial support will probably not be used but in all cases, it will remain there and not be used for other purposes. At the same time, he said that the high percentage of non-performing loans has emerged as a serious problem and added that the Bank of Greece should be ready to cover the probable capital requirements of the financial institutions.
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