Liquidity in Greece needs to be strengthened by the inflow of capital from abroad – amounting to some 20 billion euros per year – as domestic savings will not suffice, the Hellenic Federation of Enterprises (SEV) warns in its weekly bulletin.
SEV notes that investment in Greece currently amounts to 20.6 billion euros per year, which is less than half the 43.5 billion euros invested in 2009. For investments to quickly return to the required amount of 40 billion euros per year and lead the economy out of its post-program misery, given the limited national savings, Greece needs a capital influx from foreign investors.
“Access to international markets is needed, not for consumption purposes, as was the case in the past, but for investments,” the SEV analysts stress.
The country’s savings today total more than the 16.2 billion euros of 2009; however, the composition of that figure is very different, as the annual savings of households are negative (-8.3 billion euros), and those of corporations and banks are positive (22.3 billion euros), as are those of the general government (6.6 billion). In 2009 households had saved 12 billion euros, enterprises and banks had put away 28 billion euros and the general government had negative savings of 23.8 billion as it ran up fiscal deficits via borrowing from abroad.