Reuters: The reshuffle won’t help Greece

Reuters: The reshuffle won’t help Greece

For the reform program in Greece and how it can proceed with the new “shape” of the government after the reshuffle is mentioned in an article of an analyst of Reuters, Hugo Dixon, who didn’t hesitate to call the Greek Prime Minister a “populist”.

The article entitled “Is Greece losing its reform path?” refers to a “workout” done by Antonis Samaras in the last two years and his decision on the reshuffle. “The moment he begun to achieve goals, he proceeded to a reshuffle” he wrote and continued: “Samaras could have continued with the team that helped to deliver this success, but after the defeat of the center-right New Democracy in the European elections from SYRIZA, the left radical formation, promoted some populist politicians”.

“The former Minister of Finance, Stournaras, took the important role of the central bank governor. The Ministers for economic development and health, among the most effective reformers, were also demoted. The new Minister of Finance, Gikas Hardouvelis, is a respected economist, but some of the other new Ministers have begun to criticize the measures that Greece has already agreed to implement. The new team is unlikely to be equally effective in the execution of the program, like the old” is underlined. The analyst also notes the delay on the selection of the new President of the Greek Republic: “If there isn’t a support of 60% of the Parliament, early general elections in March 2015 will be done”.


The economy

“The Greek economy hasn’t yet escaped from danger despite the fact that measures to balance public finances and recovery of national competitiveness have effect” the analyst believes and continues: “Athens regained access to bond markets in April and the same was achieved by banks. The unemployment rate declined for four consecutive months, though it remains at the scary 27%. Also the economy stopped shrinking.

The creditors of Greece won’t agree to debt relief until they’re satisfied with Athens fully implementing the approved program, but the reshuffle just raises more relevant questions. Therefore, the IMF assessment on progress in Greece, which begins in fall, could continue up next year. Despite the fact that there will be some visibility after the stress tests on ECB, the Greek government is worried that it will be forced to wait several months after these tests to determine whether the market will provide the funds”.


Chinese investments and tourism

The article also refers to Greek tourism and estimates for record arrivals this summer: “Foreign investors look to take advantage of cheap labor, cheap land and a better investment climate. Just last week, the Chinese Prime Minister was in the country and signed trade agreements of billion euros stating that the country could become China's gateway to Europe”.