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Greek business fears that recession will continue in 2014

03 April 2013 / 16:04:29  GRReporter
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Big business in Greece is preparing itself for the worst and is not leaving room for false optimism because it will fall down on enterprises like a boomerang. This is the impression the President of the Hellenic Federation of Enterprises Dimitris Daskalopoulos gave at a meeting with the Foreign Correspondents Association in Athens. In his opinion, recession in 2013 will be deeper than officially recognized and growth will not come in 2014 as officially forecasted. He warns that Greek society will go through severe trials.

    Economic growth will not come while the taxes in Greece remain extremely high and tax rules are constantly changing. "The point is not to argue with the Troika whether to increase or decrease VAT by one percent. We should impose a stable tax system for at least 5 years ", requires Dimitris Daskalopoulos.
    He is not particularly optimistic as regards the other obstacle to economic growth, namely high interest rates of banks. "They blame the banks for not lending to healthy business initiatives when they had liquidity and for getting involved in risky loans with higher interest rates. And they punished them in a way that has directly destroyed them," states the entrepreneur. According to him, only now, are we seeing the consequences of last year's PSI or the haircut of debts to Greece’s private lenders and many people are only now realizing that other solutions could and should have been sought.
    Today, the banking system in Greece is passing from one stage to another, from a large number of competitive banks to a small number of large-sized institutions. "Nobody can be sure that the interest rates will fall after the bank recapitalization and the mergers between them," states the president of the Federation of Entrepreneurs.
    The crisis in Cyprus is an additional burden, which could further reduce Greece's GDP by 1%. 9% of Greece’s exports go to Cyprus and the country supports its only positive trade balance in this way. Dimitris Daskalopoulos recalls that following the decision of the Securities Commission, all companies listed on the stock exchange have disclosed their assets in Cypriot banks and that the information is public. "I do not have information of any other of our members having serious problems with deposits in Cyprus", he assures.
    The entrepreneur admits that many Greek companies have been cashing their assets in Southeast Europe to resolve the liquidity problem. "Unfortunately, this is one of the hidden consequences of the debt crisis. Greek business is forced to cede its leading position in the region, which it itself had won through the strong expansion policy in the 1990s. A policy, which it pursed on its own, without any government support," said Daskalopoulos who does not see the possibility of discontinuing the trend of withdrawal from the already “conquered” markets in the near future.

Tags: Dimitris DaskalopoulosHellenic Federation of EnterprisesDebt crisisBanking sectorInvestment in Southeast Europe
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