Growth to be anaemic
Greece will need investments of some 268 billion euros in the period from 2017 to 2022 in order to achieve a rapid economic recovery. However, a study by PricewaterhouseCoopers argues that according to projected funding flows, those needs are unlikely to be met.
The most likely scenario, according to the PwC study, is that Greece will shift from recession into an anaemic recovery due to lack of investment. It notes that “Greece has entered a vicious cycle of recession and credit inadequacy that have fully undermined competitiveness. It is particularly likely that the upcoming recovery will suffer from the lack of funding.”
The study also highlights the structural difficulties existing in Greece for the realization of systematic large investments. They are summarized by enterprises’ low returns, the nonexistent credit expansion, scanty savings, the shrinking of “soft” financing – mostly originating from the European Commission – and the expansion of nonperforming loans.
PwC says Greece needs more confidence in the political process and its creditors, the active management of NPLs, an acceleration of infrastructure investment, a revival of the housing market, changes in the framework of the banking system, a mobilization of funds for small enterprises, an increase in soft financing and the stabilization of the tax system.