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A 2% decrease of the GDP for 2009

13 February 2010 / 12:02:16  GRReporter
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There is a true media war between the Greek official representatives and their European partners before the important meeting of the ministers of finances of the European Union on February 15th and February 16th. On the meeting a specific decision has to be taken regarding the eventual European aid for the Greek economy which is currently in trouble. The Greek Prime minister has obviously lost his patience and he called his European colleagues “indecisive” because of their much too general as a whole support for Athens announced on Thursday. On the meeting of his cabinet Papandreou stated that his country has turned into a “test animal” for the European Union.

The comments of the opposite side regarding the eventual economic assistance, which the countries from the euro zone would provide for Greece also never stop. In an interview for the “Spiegel” magazine, which will be published on Monday, the member of the Board of directors of the European Central Bank Jurgen Stark describes the measures, announced by the Greek government as “the absolute minimum which has to be done”. According to him Greece has to put an order in its house by itself and to undertake additional measures in order to avoid even worse performance depreciation of its economy. Jurgen Stark rejects the idea for financial assistance of Greece on bilateral grounds for example by Germany and describes it as “nonproductive and completely contrary to the requirements of the monetary union”. The banker rejects the idea for issuing European bonds with the purpose of financing the debt of Greece, which according to him will not in any way contribute to the improvement of the public finances of the country.

Meanwhile the latest statistical data became known to the public regarding the Greek economy. They show that for the year 2009 the Gross Domestic Product of they country has dropped by 2 percent and the decrease for the fourth trimester of 2009 was 2,6 percent. The decrease is even greater having in mind that the country ended the year 2008 with a 2% increase of the GDP. The government provides for a growth of the GDP by 0,3 percent in the year 2010 and on this grounds is prepared also the annual budget. The analyzers define these expectations as too optimistic and believe that for the execution of the goals of the Program for stability and development even bigger restrictions in the public sector are necessary – for example the cancellation of the 14th salary for the government employees and the increase of the VAT by 2%. For this insist both the European Union and the IMF.  

“The data about the Greek economy show that not only the public finances are the problem which the Greek government has to fight with. There is a real economic problem and it is not impossible that we would witness an even greater decrease of the GDP. It won’t be easy for the country to exit from the difficult situation it is in right now”, commented Jurgen Michels from Citigroup.


Tags: George Papandreou euro zone Greek economy GDP
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