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Goldman Sachs, the well known financial group, announces in its annual report Greece not ready and unwilling to make any economical reformations in direction to shrink the public sector and contribute for economic development. The institution predicts that neither New Democracy, nor PASOK are about to undertake the urgent changes. According to Goldman Sachs, the European Commission will no longer show condescension for the country and will start applying strict financial measures.

Goldman Sachs employees say current government did not manage to conduct the reformations needed. In relation to the socialists from PASOK analysts underline that despite their success in integrating Greece with the Eurozone, their politics of government are remembered by economic misbalance and budgetary deficit. The financial group says the measures announced by both parties during their pre-election campaigns are insufficient. At the same time, the report notes that the Greek electorate is ready for serious economic reforms. Among the political elite the understanding of the need of such changes exists. However, even if the new government expresses the political will to enact them, this will hardly happen.

People at Goldman Sachs believe that the world financial crisis has hit Greece less severely compared to other countries in the Eurozone. However, they are certain that recovery from the recession will be delayed in Greece, as opposed to these countries. Analysts from the financial company note that the current model of economic development in the Mediterranean country needs revision as it is already outdated and has nothing left to offer. In relation to fiscal policy, they believe that the budgetary deficit has become a usual burden for the Greek economy, and the current situation is not a result from the financial crisis. They add that public borrowing must be decreased drastically so as to avoid piling suppressing interest losses. Goldman Sachs explicitly concludes that even if the Greek government manages to insert a balanced budget, it will still have to pay tremendous interest on its existing debt, which amounts to €13 bn.

Goldman Sachs has issued another alarming conclusion, related to Greece’s social security system. According to the financial advisor, the current state of the system combined with the faltering demographic trends pose a potential threat for the future of the Greek economy. According to analysts, there is no indication whatsoever that the new economic team in the ministry is planning to cut on public spending. Furthermore, people at Goldman Sachs express their doubts in relation to the challenges facing the new government, like all of the previous governments. Analysts are skeptical that improving living standards by increasing household income and tackling tax evasion will remain problematic areas for the new rulers as well.