·
Greece’s Prime Minister carries on his visit in US. He stressed out the need of
debt restructuring during his speech at United Nations General Assembly. In
another occasion, he invited the Greek Americans to invest in Greec
· According to Greece's Gerontological Company, unless there is a change, 4 out of 10 Greek citizens living in Greece, will be over 60 years old by 2050. At the moment, 27% of Greeks are over 60 years old.
· According to Greece's Gerontological Company, unless there is a change, 4 out of 10 Greek citizens living in Greece, will be over 60 years old by 2050. At the moment, 27% of Greeks are over 60 years old.
·
According to the Foundation of Economic and Industrial
Research (IOBE), Greece’s economic climate index increased to 83.1 in September
vs. 75.2 in August and 81.3 in July.
· Although consumer confidence continues to
decline reaching -64.2 which is the lowest level of last three years, business
expectations improved vs. previous month. More specifically, PMI increase to
43.3 (from 39.1 in August). However, it remained below 50, which indicates economic contraction.
·
According to Eurostat, Greece’s unemployment
increased to 25.2% in June vs. 25% in May, while unemployment in Eurozone and
EU remained stable at 11% and 9.5% respectively. However, Greece's youth unemployment
dropped to 48.3% in June from 51.4% in May.
·
As it was mentioned in previous
commentaries, Greek Banks’ recapitalisation appear to be the critical path for
the next disbursement of European funds and the start of negotiations regarding debt restructuring. It seems that there is progress as regards the discussions regarding the sell of the Turkish Finansbank by its parent company National Bank of Greece. If that occur, then it is highly likely that National Bank of Greece won't need capital injection.
· Press linkages indicate that Euro Working
Group will decide the list of prior actions by today Friday October 2nd. This list will be discussed during Eurogroup meeting next Monday. Jeroen Dijssebloem stated that although there are pending items, Greece is still on track.
·
Cyprus’s Laiki brought a claim to the
International Centre for Settlement of Investment Disputes seeking damages of
over 4 bios euros concerning its loss resulted from Greek state bonds haircut. However,
chances that Laiki will win the case are extremely low considering that there
is a previous case in past, of a Slovenian Bank which has lost.
·
Retail sales dropped by -7.3% in July vs. July’14);
June’s retail sales also dropped but by -0.4%. As reminder, July was the first
month after the implementation of capital controls.
·
According to Greece Confederation of Enteprises
(SEV), internal devaluation which has been occurring since 2009, didn’t increase
competitiveness due to credit asphyxiation which prevented investments.
· Meimarakis announced his candidacy for New Democracy (centre right) leadership.
· Meimarakis announced his candidacy for New Democracy (centre right) leadership.
Risk assessment.
Greece’s ageing society is committing
‘demographic suicide’ and needs immigrants to keep its workforce from shrinking
further. The local government has to proceed on necessary measures in order to integrate
refugees within its social network. There are many social and political reasons which justify this strategic option. In addıtıon, Greece needs young workforce to support the sustainability of its economic growth and pension system.
Economic data indicate that Greece continues to stay
far behind the rest of Eurozone, in terms of competitiveness and economic growth. Despite its high calibre human capital, its
natural resources and climate and its strategic geopolitical position, local political
system prevents economy from growing.
After eleven month of political uncertainty and three elections, Tsipras has started showing elements of realism and determination to support economic growth, during his visit in US. However, it remains to see if his recent U-turn as regards the negotiations with creditors and his escalating pro investments, pro-markets, pro-economy rhetoric will continue when he will return to Greece. It is not unusual for Tsipras to use different rhetoric when he travels abroad compared to the one when he addresses local audiences.
It’s a matter of days to see if Greece’s
new government can achieve the ratification of a series of measures, which will liberalise markets and open professions, will cut pensions-related expenditure,
achieve banks’ recapitalisation with minimum impact to existing shareholders.
All above are prerequisites for Greece to start discussions as regards debt restructuring, which
will enhance debt’s sustainability and attract international investments.
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