A debt relief deal is necessary but not a panacea, the Federation of Hellenic Enterprises (SEV) said on Thursday and noted it supported an IMF proposal for a front-loaded restructuring. At the end Eurogroup’s decision will prevail as “elections in France and Germany are delaying developments,” SEV added.
Commenting on a difference of views between the IMF and European partners over Greek debt relief measures, SEV said “the country was stuck in a situation where investors cannot clearly evaluate debt sustainability, which according to the Eurogroup depends on a strict implementation of memorandums in the decades to come.”
In a weekly bulletin on economic developments, SEV stressed that a decision reached in a May 25 Eurogroup – apparently fully accepted by the Greek side – acknowledged it was almost impossible to take specific measures here and now – as wished by the IMF, which will continue evaluating the Greek economy and has lent the country 32.1 billion euros in the first two memorandums.
The Federation said that the immediate announcement of substantial debt relief “would sent a message to markets that Greek debt was sustainable and that in turn could improve significantly investors’ expectations and restore confidence in the outlook of the Greek economy, accelerating a Greek economic recovery and an exit from the crisis”. SEV, however, added that no investor would bring his money to the country just because it was given debt relief but that a deeper, essential and permanent change in the way the state and the economy operate was needed.
SEV noted that from the 59 key deliverables of this review, only five directly linked with market competitiveness have been implemented.