The completion of the bailout memorandum evaluation is certainly a first, positive step for the country to finally start entering a period of normalcy. It is a necessary but not sufficient condition to start seeing light at the end of the tunnel.
That was noted after yesterday’s Eurogroup by Jeroen Dijsselbloem and the European Commissioner for Economic and Financial Affairs, Pierre Moscovici, who underlined the need to pass into law the measures agreed upon and to implement the reforms.
Despite the steps already taken, the Greek economy still finds itself in a delicate balance. That is confirmed by the third quarter data on growth that were announced yesterday. The GDP growth in the most productive quarter of the year (the summer tourist season) was lower than projected, casting doubts on whether the overall target of 1.6 percent growth for 2017 can be achieved.
After nearly eight years of painful fiscal and structural adjustment, with a dramatic drop in incomes, and with excessive tax payments, the competitiveness of the Greek economy remains at low levels.
Moreover, certain important investments which could have improved the climate are crawling between the bureaucracy and a lack of political will, while the banking system finds it impossible to play its proper role, as it is trapped in the rut of non-performing loans.
The completion of the evaluation by creditors, despite the positive signal it sends, on its own is not enough to change the situation in the economy. Indeed, with the government cultivating political polarisation, it is very easy to reverse a positive climate.
If the government truly wants to exploit the positive momentum, it is obliged to undertake specific political and economic initiatives.
Growth will come neither with pious wishes, nor with hollow promises. They know very well that what is needed is a change in the mentality in the public sector, a more efficient judiciary without external interventions, and of course specific moves that can create an institutional and business environment that will boost investment.
That is the only way we can hope that the agreement with the troika of creditors will lead to specific, palpable results. Only in this manner can we begin to ponder the future with greater optimism.