According to a study published by the UK-based National Institute of Economic and Social Research (NIESR), Greece needs a debt write-down of about 100 billion euros, in order to stand a chance of escaping a “prolonged and sever depression”. In it study the NIESR study further argues that the recent controversial VAT hikes and in conjunction with the strict budget targets that have been set could become “self-defeating”.
Furthermore, by the end of 2016, the Greek economy is expected to have shrunk by 30% compared to its peak in 2007 and 7% compared to before it joined the Eurozone in 2001. The British think tank has also estimated that the Greek economy will contract by 3% in 2015 and a further 2.3% in 2016. Current projects suggest the Greek economy will not return to its pre-euro size before 2023.
NIESR research fellow Jack Meaning was cited in the Telegraph as stating that “we don’t see Greece getting back to the level it was when it joined the euro in 2001, let alone anywhere near where it was before this crisis struck, so this is a prolonged and severe depression for Greece”.
