Monday, February 25, 2013
The Greek economy is expected to recover in 2014, after shrinking by 4.4% in 2013, according to the European Commission report published on February 22. "Greece is emerging from a tumultuous 2012 with renewed commitment and action within a strengthened economic adjustment programme that enjoys strong backing from its international lenders," the EC’s winter forecast states, adding that the country will return to positive quarterly growth rates by the end of 2013, which will be followed by positive full-year growth of 0.6% in 2014.
This recovery will reflect ongoing positive supply-side developments, such as labour cost reductions and product market liberalization, while the bank recapitalisation process and the overall stabilisation of the country are setting the preconditions for a return of capital and renewed credit flows to the private sector.
EC: European Economic Forecast Winter 2013 & Press Release; Greek News Agenda: EC Report: Growth in Greece & EU Commission Report on Greece
- ECB’s Gains from Greek Sovereign Bonds
The European Central Bank said it earned € 555 million last year from Greek sovereign bonds, acquired during the crisis in an attempt to calm financial market fears of a eurozone break-up. The ECB's profit implies that the whole Eurosystem -the ECB and the 17 national central banks in the eurozone- could altogether have made billions in profits from the Greek sovereign bonds, that could be passed on to Athens.
Eurozone finance ministers and the International Monetary Fund agreed in November 2012 to pass on their profits from the Eurosystem's Greek bond portfolio to Athens, from the budget year 2013 onwards to help with debt servicing.
