Yesterday, Bank of Greece governor George A. Provopoulos penned a Wall Street Journal article titled: "From Greek Crisis, to Turnaround".
The author's article highlights factors associated with the nation's economic strides, after the international financial arena predicted that Greece would end up leaving the euro zone.
Provopoulos states that the turn-around of the Hellenic economy has been phenomenal. 2013 marked a primary fiscal surplus of almost 1% of GDP, after the primary balance altered from a 10.5% GDP deficit in 2009. However, competitiveness determined by labor costs associated with Greek trading partners, has upgraded by over 30%. Structural reforms have improved competitiveness, which has created fluid product and labor markets.
The Bank of Greece delegate references that this is the first surplus Greece has experienced since World War II, and that a rebalancing of the state's economy is occurring now. In 2013, the share of goods and services exports increased to 28%, compared to 2009's 18% rate.
The Greek banker states: "What makes these achievements especially striking is that they have come amid a 25% contraction in the economy over the last five years—a circumstance that has meant moving budget targets, and without the option of devaluing a national currency. I expect this record of progress to continue".
Provopoulos added, "I expect positive growth to return this year, modestly at first, and then to gain momentum". He rightly writes that Greek reforms are producing stellar results. Since 2012, interest-rate spreads have declined severely, Athens Stock Exchange share prices have more than doubled, banking systems have returned to the banking sector, and positive economic gauges have occurred.
The Hellenic writer discusses Greece's current unemployment challenges, and believes adjustment fatigue and complacency are the largest concerns. Provopoulos calls for additional required structural reforms and consolidation in certain sectors. He adds, "These reforms, however, will be easier to implement against the background of a recovering economy".
George A. Provopoulos concludes his Wall Street Journal article with the following statement: "The Greek people saw what the doomsayers could not: that their future prosperity and security are inexorably tied to the euro".