The Hellenic Federation of Enterprises’ (SEV) weekly bulletin warned of a continuing decrease in incomes with a simultaneous increase in consumption in Greece, saying this is a major risk to a sustainable economic recovery in the crisis-bedeviled country.
SEV, Greece’s largest and most influential employers’ association and corporate advocate, said a divergence between consumption and disposable income is linked with already negative rates of savings. The bulletin warned of an intensified trend whereby resources already withdrawn from banks, or derived from liquidations of assets, will be used for consumption.
The juxtaposition of higher consumption amid decreasing disposable incomes is not conducive for a viable recovery of the Greek economy in 2017, SEV’s bulletin noted.
Moreover, an increased scrutiny on the Greek economy picked up this month due to months’ long impasse in concluding the second review of the Greek economy and in setting a course for after 2018, when the current bailout ends.
JP Morgan predicts that the leftist SYRIZA-led coalition government will eventually overcome differences with creditors in the coming period and avoid snap elections, while finally concluding a second review of the Greek program.
A less likely possibility, at roughly 40 percent, is an election in Greece this year. JP Morgan qualifies this scenario by citing what it calls the high political cost entailed in concluding the review with creditors.
Regardless of any return to the ballot box, however, the NYC-based investment bank foresees that in the end Athens and creditors will reach an agreement to continue the bailout program, a development that will minimize “Grexit” speculation.
In pointing to a possible election result, JP Morgan predicts a center-right government, one that is more effective and able to forge a productive relationship with creditors.
Finally, Credit Suisse publicized five possible scenarios for the current impasse in negotiations with creditors, namely:
— a quick resolution, i.e. this month
— a further delay in order to continue negotiations
— brinkmanship, reminiscent of July 2015
— Early elections before the summer, and finally,
— Grexit
As per the last prospect, however, CS is quick to note that there’s nary any support in the Greek parliament for such an option, ” even less so in the country”, basing its argument on recent opinion poll results.
