call, “restart of the economy”, and (b) to acceler-
ate the implementation of structural changes that
have been delayed, and the promotion of a large
scale privatization programme. These measures
and policies will allow the Greek economy to
escape from the low growth/high deficit trap and
pave the way to recovery.
During those few months in office, the new govern-
ment has created the conditions for gradually
reversing the economic climate and facilitating the
economy’s recovery. We already have clear signs
and indications that we have left the deadlock of the
previous years behind. These signs that allow the
formation of positive expectations are:
● The execution of the State Budget for 2012,
which, despite the deeper-than-expected
recession, is considered at least satisfactory,
and by all means better, than the Programme’s
targets.
● The cost of servicing the public debt has
declined significantly, as the interest rate on the
recent issue of six-month T-bills by the Greek
government was the lowest since the beginning
of 2010. Moreover, the spread of the Greek 10Y
bonds has been falling dramatically since the
June 2012 elections (12.06.2012: 2,788 bps
and 29.1.2013: 848 bps).
● The Greek stock market is showing signs of
recovery, as the period June 2012-January
2013 saw a significant improvement in investor
sentiment (the ASE General Index rose from
476 to 1,005 bps).
● Inflation is de-escalating, as the harmonized
consumer price index, despite the distortions
in the markets, stands at its lowest level since
October 2009.
● The competitiveness of the economy is
strengthened and the business environment is
reinforced, as the country’s ranking in the
“Doing Business” Report has improved by 22
places compared to last year and the current
account deficit for the period January-
November 2012 has been reduced by 73% vis-
à-vis the corresponding period of 2011.
● The economic sentiment is steadily improving,
as in December 2012 the relative indicator
reached its highest level for the last 20
months, while the most important difference is
that, in relation to the euro area, the gap is the
smallest since October 2009.
● Savings are gradually returning to the Greek
banking system. The total amount of deposits
has increased by approximately
€
15 billion
since mid-June 2012.
● The restructuring of the banking system has
commenced through mergers and the creation
of new, large banking institutions. The recapi-
talization of the core banks, which will be com-
pleted in the first half of 2013, will create sound
financial institutions that will play a significant
intermediating role in the economy and will
propel growth.
● The strategy to attract foreign investments has
yielded its first results, as foreign interest for
investing in Greece has increased, with many
foreign companies participating in the privati-
zation programme and many others conclud-
ing deals with Greek companies.
All these signs suggest that we are on the right
track. Much more has to be done. It is true that
Greece is currently at a crucial junction on its way
to economic and social recovery. The first signifi-
cant and necessary steps have been successfully
taken, creating the prerequisites for economic
growth. The new government is determined to
take the next decisive steps towards economic
recovery and development.
Trade with Greece
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