Greek economic sentiment climbs to highest in two years

Greek economic sentiment rose to the highest in more than two years in December as euro-area nations and the International Monetary Fund approved the payment of bailout funds for Greece, ending months of uncertainty.

An index measuring short-term economic trends stood at 84.1, up from 79 in November, the Foundation for Economic & Industrial Research, known as IOBE, said in an e-mailed report on Tuesday. Consumer confidence rose 2 points to minus 72.1, the Athens-based foundation said.

Prime Minister Antonis Samaras’s government concluded months of negotiations in November with the troika of the European Commission, the European Central Bank and the IMF, with parliament approving the austerity measures demanded by creditors in return for aid. Euro-region finance ministers last month agreed to release the loans needed to keep Greece solvent.

“The end of negotiations with the troika, despite the significant burden they placed on large segments of the population, eased the uncertainty on economic actors about the country’s course,” IOBE said. “It eliminates currency uncertainty, at least in the medium term, while emphatically confirming the will of our partners for a joint approach in solving the country’s difficult problems.”

The improvement in sentiment was reflected in all industries except construction, which dropped to the lowest level since March, according to the report. [Bloomberg]