The six-year long recession which has brought Greece to the brink is likely to end in 2014 according to the latest report released by the European Commission. A glimmer of hope perhaps, but the report goes on to warn that unemployment in the nation will remain above 20% for at least another three years.
The report posts a relatively upbeat appraisal of the situation in Greece saying;
“Public finances are steadily improving, the banking sector recapitalisation has reached an advanced stage and important structural reforms are being implemented, although further major efforts are needed to fully deliver the delayed public administration reform and to make the new semi-autonomous revenue administration effective in the fight against tax evasion.”
So far Greece has received over €200 billion in bailout funds since 2010 after the nation was locked out of the international bond markets after its economy collapsed. In return for the bailout funds the Greek government imposed strict austerity measures which led to widespread wage and pension cuts as well as forcing thousands of Greeks out of work. Despite the hardship the measures have inflicted upon the Greek people they have helped bring down debts and deficits but seriously harmed the potential for growth.
On the unemployment from the report says; “The number of dismissals still remains high and the overall labour market is likely to remain weak until GDP begins to recover.
Hence, the annual unemployment rate is projected to peak at 27.0% in 2013. Once the recovery gains traction, especially the frontloading of wage adjustments is projected to give rise to a relatively rapid and sustainable decline in unemployment to 26.0% in 2014 and to 21.0% in 2016.”
The Commission estimates that Greece’s economy, after contracting 4.2% in 2013, will next year grow for the first time since 2008. It forecasts growth of 0.6% in 2014, but warns the recovery remains fragile and will depend on faster reforms. The outlook beyond 2014 remains inherently uncertain as according to the commission further cuts will be needed to be made.
The report adds; “The fiscal outlook depends to a large extent on progress in strengthening the tax and social security revenue administrations. Within the current macroeconomic framework, the gaps are currently estimated at about 1.7% of GDP in 2015 and 2.1% of GDP in 2016. The task of filling the gap in 2015-16 will be taken up in the context of the 2014 budget
negotiations in the fall.”
The Commission added that more must be done to improve Greece’s tax collection system and shrink its still oversized public sector. Which basically means more austerity is in order for the Greek people.
The Euro edged up against the Pound after Fridays set of economic data showed signs that the Eurozone economy could be improving.
New registrations rose by 1.8% to 108 million in April, compared to the same period a year ago, but although the figure was an improvement on last year, in absolute numbers it was the third lowest total for April on record. Against the US Dollar the Currency fell after the US Dollar continued to be boosted by optimism that the US economy is recovering.
Current Euro (EUR) Exchange Rates
The Euro/US Dollar Exchange Rate is currently in the region of: 1.2816
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8438
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.3106
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.5873
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7764
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1835
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7567
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6304
(Correct as of 15:30pm GMT)