The Best of GRReporter
flag_bg flag_gr flag_gb

The Troika Greece must fear

14 February 2015 / 23:02:54  GRReporter
2316 reads

A publication of the American agency Bloomberg argues: "SYRIZA came to power on a reformist platform against the memorandum. The bugbear during the election campaign was the Troika comprising the European Union, the European Central Bank and the International Monetary Fund. The Troika is the institution, which goes to Athens to see whether Greece is in compliance with its bailout terms".

According to the article, "After the election victory, SYRIZA’s leader Alexis Tsipras announced the end of the Troika and the start of renegotiating the international agreement on the Greek bailout. However, while negotiations are still in progress, there is another troika Greece must fear."

"There are three key risks to the Greek economy at the moment:

-        continuing negative growth: the latest data show that during the fourth quarter of 2014 the Greek economy shrunk by 0.2% despite projections for a 0.4% growth;

-        disastrous public revenues: data of the Greek finance ministry show that in January 2015 the surplus amounted to €267 million against the expected €1.29 billion. The gap is almost entirely due to skimpy budget revenues resulting from the government's inability to properly collect taxes;

-        insecurity in the banking sector: on 4 February, the ECB rejected Greek sovereign bonds as security on debt owed to the bank. The ban came into force on 11 February, with Greek banks resorting to the Emergency Liquidity Assistance and the Greek central bank to foot their bills."

The longer the Greek government renegotiates its bailout package, the more intense the political uncertainty becomes, hence it is more likely that one of the above risks materializes, the article argues.

In conclusion, the article argues that "if the Greek government makes the mistake of wasting a lot of time in bailout negotiations and fails to devote enough time to boost the economy, its victory may prove Pyrrhic. Should this happen, the government will come back with a victory under its belt to an economy, which may no longer be bailed out."

Tags: Bloomberg Greek economy risks
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