Source: BMI, Eurostat dictatorship in the mid-----s. Beset by enormous structural economic challenges and crippled by a mountain of debt that is nearly impossible to pay down, pushing through the reforms necessary to revive the economy will prove a herculean task. ...Beset by enormous structural economic challenges and crippled by a mountain of debt that is nearly impossible to pay down, pushing through the reforms necessary to revive the economy will prove a herculean task. Such is the severity of the debt crisis, and its impact on Greek households, that the political system is likely to become more fractured, with much soul searching and consideration of Greece s place within the eurozone and EU. Greece has reluctantly emerged as the focal point of the global austerity debate, with policymakers in Europe hoping that success in the Hellenic Republic will afford sufficient politi- cal capital to introduce similar (albeit less severe) reforms at home. However, this has given rise to anti-EU and anti-bailout sentiment, with some critics lashing out at the perceived loss of sovereignty as a result of the international lender s imposition of stiff conditions on emergency loans. ...A related issue is the persistence of corruption in the public and private sectors. Greece has long had a poor track record on eradicating graft, with special interest groups proving a -- Business Monitor International Ltd www greece Q- ---- extreme unemployment underpinning political Fracturing
...Source: BMI lurched into deflation which will erode some of the positive contribution to the debt-to-GDP ratio from real growth. Ulti- mately it is the difference between nominal economic growth and nominal interest rates that typically determines the trajectory of debt over the longer term. ...Moreover, the bonds were sold at a yield of under - further indicating the strength of demand for Greek debt. With borrowing costs already low and heading lower on the back of the global hunt for yield and speculation that the ECB could start some form of eurozone quantitative easing programme, the government is likely to return to the market with additional issues. However, yields around --- are still unsustainable over the long-term given the weak outlook for economic growth and inflation. ...This further plays into our view that the long run growth potential of the Greek economy will be weaker than before the sovereign debt crisis first erupted. Long-term political outlook a Decade of austerity and instability
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