agreed reforms, without any further delay. “If just
two-thirds,” says Mr. Stournaras, “of the agreed
reforms in the goods and services markets are
implemented over a five-year period, the cumula-
tive benefits within the first three years of imple-
mentation will be about 4 percent of GDP less
than they would be if 100 percent of required
measures were implemented over five years”
(“Economy’s response to memorandum offers
hope”,
Kathimerini
newspaper, January 2, 2017).
The risks
The domestic and international factors that could
have a negative effect on the economy’s recovery
during 2017 include:
• Major delays in the conclusion of the second
review. Any delay in the implementation of the
adjustment programme will seriously hinder
the anticipated recovery: economic sentiment
will be adversely affected and uncertainty
regarding the completion of the programme
will be renewed;
• limited ownership of the agreed reforms;
• major delays in the lifting of capital controls;
• the slow pace of the flow of deposits back to
the domestic financial system;
• slower-than-expected economic growth in the
euro zone, because of the emergence of pro-
tectionist trends;
• exacerbation of the refugee crisis and rise of
geopolitical tensions. The uncertainty related
to the change in American foreign and eco-
nomic policy under the new presidency give
rise to ambiguity regarding the new global role
of the US;
• successive crucial elections and the rise of
Euroscepticism in the EU. A possible strength-
ening of Eurosceptic forces will affect the deci-
sions of many EU country leaders, threatening
to weaken the Union’s collective institutional
bodies.
Foreign investment is needed
In the best-case scenario for the Greek economy,
Trade with Greece
50
