If the positive trajectory the Greek economy has followed to date is reversed and its ability to refinance public debt over the next decade is lost, it is not unlikely that Greece will return to the situation it faced in 2010, stressed Mr. Alexandros Exarchou, Chairman and CEO of the AKTOR Group, speaking to journalist Nikos Hatzinikolaou during a discussion at the “Greece 2030” conference held in Athens.
As the head of the AKTOR Group noted, if the positive outlook for the Greek economy is reversed, the gains of recent years will be lost, we will return to deficits, and unemployment will rise again, it will not be at all difficult for Greece to return to the situation it was in in 2010, given that starting in 2032, when the debt grace period expires, it will once again be called upon to refinance its debt—and for that to happen, its creditors must feel confident about the economy’s positive trajectory.
Ensuring favorable conditions for the economy
Mr. Exarchou noted that we must not forget the reasons why we reached 2010, but also the fact that the structures of the Greek economy have not changed drastically since that time, despite the fact that the country, through tremendous effort, managed to improve its prospects by creating the necessary conditions for that purpose.
He clarified, however, that concern could arise only if the impression is created that there will be no stable governance, expressing his hope that this will be avoided, as, as he added, this is the first time he has seen foreign capital taking on business risk in Greece, and for what has been achieved to continue, there must be basic conditions of predictability in the economy.
Significant foreign investments
As he emphasized, the country is now becoming a destination for major investments, such as the bond issues and capital increase of Credia Bank, where significant foreign capital was invested. He added that early debt repayment sends a strong message abroad that Greece has regained its strength, noting that if these positive efforts continue, the country will continue to grow.
Greece has achieved a great deal
For this reason, Mr. Exarchou continued, it is extremely important to maintain the momentum that has been created—namely, the combination of fiscal discipline, high growth rates, and the continuation of the conditions that made foreign capital inflows into Greece possible.
He also noted that we should focus on what our country has achieved to date and not forget what preceded it in the previous decade, when the economy suffered a collapse and was driven into internal devaluation.
Forecasts for high inflation and Eurobonds
Mr. Exarchou estimated that the coming winter will be difficult for Europe due to rising inflation, which is a result of geopolitical developments and the lack of natural gas availability in international markets in light of the ban on Russian gas and due to the damage suffered by Qatar’s energy infrastructure.
Furthermore, he noted that Europe must strike a balance in its energy sources so as not to depend on any single supplier and avoid becoming dependent again, as happened with Russian natural gas and the war in Ukraine.
He also emphasized that the EU must accelerate its response to address the issue and, in light of the inevitable interest rate hike by the European Central Bank, he expressed his hope that the EU would proceed with the issuance of a Eurobond to address the situation, following the model of the Recovery Fund a few years ago.