Will 2014 Crush or Redeem the Greek Economy?
The eurozone as a whole has been struggling to maintain its lackluster recovery, but certain countries are hurting more than others. Greece is hoping to receive some monetary aid from the eurozone in 2014 so as to better deal with its heavy debt problem in Athens, but whether or not that happens, and to what extent, will be dependent on the progress it makes in the coming year. According to Reuters aid may be coming, but it likely won’t be more than a gesture.
“We don’t want and we’re not asking for a haircut,” said Yannis Stournaras, Greece’s finance minister, according to Reuters. Stournaras is referring to the highly unlikely possibility that the eurozone might cut out a section of the 240 billion euros — $328 billion — in the red that Greece finds itself in, lessening the pressure of the loans it still has to pay.
“A reduction in the interest rate and a pushing back of the amortization schedule is more effective from the point of view of the financial markets,” said Stournaras, according to Reuters. Monetary support for Athens will reportedly be largely dependent on where the country is at in terms of its budget surplus in April. In 2013, Athens reports it had a central government primary budget surplus of 700 million euros, or $956 million.
Athens said it is projecting a bigger surplus for this coming year, minus debt payments. “We are delivering the primary surplus earlier than expected. That will set the conditions for some sort of debt relief exercise,” said Greece’s Prime Minister, Antonis Samaras — according to Reuters.
“We’ve worked hard and delivered. There was a decision in November 2012 and we expect that decision to be respected,” said Samaras. Greece is looking at a steep uphill battle to balance its debt with its Gross Domestic Product, but the best hope for the Greek economy will depend on growth, inflation, and likely the sale of whatever state assets can be spared.