Greece: A new step – BNP Paribas

Frédérique Cerisier, Research Analyst at BNP Paribas, suggests that the end of the third economic adjustment programme of Greece sounds like a new chance after several long years of adjustment programmes and inspections as the economic recovery is now settled.

Key Quotes

“Last spring, GDP grew positively for the sixth quarter in a row. A first since 2006. It means we could have a 2% growth rate in 2018. Thanks to catch-up effects, an acceleration might be seen next year even though not all indicators are green. The banking system is not ready to sustain the recovery and support credit supply. And the economic environment is less favourable than in 2017. Acceleration would happen countercyclically, despite Greece not being in synch with the rest of Europe which is now into a slowing phase. The main fear of creditors is that the future economic policy could unravel some of the past adjustments.”

“Athens had to give Brussels this week its 2019 budgetary estimate like other European capitals.”

“With the legislative elections to be held in one year, the government wants to go back on this commitment. Time will tell if the Europeans agree, whose opinions on the Greek situation have been regularly differing from that of the IMF since 2015.”