The Best of GRReporter
flag_bg flag_gr flag_gb

New spread index increase

18 November 2009 / 13:11:23  GRReporter
2675 reads

Strict control, cutting state expenses and lowering gratis aid in state administration and bank sector, are the additional changes in the draft budget for 2010, which the Ministry of Finances is preparing to introduce. Those measures were introduced as a result of the presentation at the beginning of the week of the local bonds return in comparison to the German ones. On Monday the spread index has increased to 158 points compared to the results from Friday – 138. This increase can harm the Greek economy in case the government does not introduce stricter measures for managing state capitals and subsidies. As “punishment” for second consecutive year Greece will have to make more credit expenses and pay higher interest rates. The additional measure will aim to lower even more the budget deficit for 2010 – with 0.2% to 0.3% of the GDP.

Experts in the field said that the increase of the spread index comes in a key moment, when next year’s budget will be voted for. Greece’s financial plan needs to convince all international markets that it wants to apply structural changes in the public sector and finances. Otherwise the lack of trust will threaten the country from exiting the economic crisis. If this year’s credit program included credit rates of 0.5 points lower, then the gain would be €325 million for each of the following five years. This was expressed by the spread index increase in the budget and state crediting.

Finance minister Georgios Papakonstantinou said that “Greece is a country, which does not have a problem to give out credit. It is a country, where the people know about the problems and want to overcome them”. 

Tags: Spread index Greek economy Banks Credit
SUPPORT US!
GRReporter’s content is brought to you for free 7 days a week by a team of highly professional journalists, translators, photographers, operators, software developers, designers. If you like and follow our work, consider whether you could support us financially with an amount at your choice.
Subscription
You can support us only once as well.
blog comments powered by Disqus