The Hellenic Federation of Enterprises (SEV) was particularly critical of the government, as well as the country’s creditors, on Thursday, warning that the policy mix under consideration will aggravate the Greek recession. It also estimated that the new tax and social security bills do not tackle the country’s biggest problem, which is the fact that labor is not encouraged, and spoke of a policy destined for failure with the economy mired in stagnation.
SEV’s weekly bulletin on the Greek economy said in no uncertain terms that the failure to complete the negotiations on the bailout review, and especially the issue of the extra fiscal measures worth 3.6 billion euros up to 2018 that are being contemplated, “generate huge uncertainty in the economy and bring back memories of the nightmare of the first half of 2015.”
The industrialists’ association further noted, “It appears that the funding margin ahead of the public debt servicing needs is becoming ever narrower, as the concentration of state entity cash reserves at the Bank of Greece reveals.”
Given the above, SEV argued that “it is now certain the economy is entering a new recessionary phase, with a policy mix relying on the excessive burden imposed on consistent taxpayers, so that the necessary – albeit not rationally planned – cut of pensions expenditure is put off for the future.”
The federation’s economists added in very clear terms that “without any measures taken for the immediate restarting of the economy and the containment of tax evasion, this mix of measures leads nowhere and threatens society with further impoverishment. The government’s insistence on raising taxes instead of cutting expenses, and the recessionary impact that this will have on the economy, leads to the troika’s shortsighted persistence on contingency measures which, unfortunately, increase further the recessionary wave and will be the final blow to the economy.”