Greece seen to be backtracking on reforms

Greece is quietly backtracking on the reform process that is supposed to see it emerge from the bailout program, according to an opinion piece published yesterday by Bloomberg where the author urges caution as “growth is faltering” and “prospects don’t look promising” – ahead of an election year too.

“Financial investors should curb their optimism,” Phyllis Papadavid says in the piece, predicting that “Greece’s return to the markets and its economic recovery are likely to be bumpy and slow – especially if it continues to delay key reforms.”

Addressing a series of issues preventing Greece from staging an economic rebound, such as poor consumption growth, tax hikes, pension cuts and weak investment spending, as well as failure to scale back domestic overrregulation, corruption and bureaucracy, the analysis highlights that, “quietly, the government has backtracked on important reform efforts such as privatizing key industries, where it continues to miss its targets.”

“A stalled recovery will mean no real boost in revenues to fund investments. Debt dynamics will also continue to result in a higher cost of financing,” Papadavid warns. “With a 176 percent debt-to-GDP ratio and little prospects for growth acceleration or healthy capital inflows, investing in Greece is not for the faint of heart.”