ECONOMY

Measures of 2 bln euros set to be added to bill

Measures of 2 bln euros set to be added to bill

The total value of the measures Greece will have to take is up and still rising if the reduced targets of the primary budget surplus are to be met. Finance Ministry officials estimate that the additional measures that will be required could reach up to 2 billion euros or over 1 percent of gross domestic product on top of those already negotiated between the government and its creditors.


The reason for the increase in the sum is because there has been a drastic deterioration in the Greek economy’s prospects within just one week. The uncertainty that the referendum’s announcement generated in the real economy, the closure of banks and the imposition of capital controls had not been incorporated into the previous macroeconomic model.

Financial activity has already been frozen by the capital controls and the repercussions will continue as long as they remain in place. Furthermore, tourism, Greece’s main industry, has also started experiencing the impact of the uncertainty with booking cancellations, and that will also have a negative effect on GDP.

All this means the technical teams of the government and the creditors will have to find a new basis as they restart the debate on fiscal adjustment and the new measures required. Ministry officials are already saying that the estimate for 0.5 percent growth this year should be revised down.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.