Greek economic and market analysts are in agreement: The international recession will be serious and will not leave the Greek economy unscathed. They also seem to be realistic about the duration of the shortfall in the growth rate and the opportunities which Greece must tap into in order to cushion the effects of the slowdown. There are unmistakable signs of resistance, notes Pavlos Mylonas, head of economic analysts at the National Bank. Giorgos Provopoulos, adviser to Alpha Bank, believes this can be explained by the fact that we have fiscal relaxation without public deficits, interpreting in this way the positive influence which the inflow of EU investment subsidies has on the economy. Thymios Bouloutas, Eurobank’s head of investment strategy, points out that even given a revised lower growth rate of 4 percent for this year, the Greek economy will accelerate at twice the average speed for the EU as a whole. Miranda Xafa, head of Salomon Smith Barney’s analysts in Greece, believes that the negative impact of recession will be more pronounced next year, and cites the example of tourism. This sector, which is affected by the crisis more directly, contributes 7 percent of GDP, and, therefore, a 15-percent drop in business will deduct a whole percentage point from the gross domestic product, she explains. Alpha Bank warns of the same danger in its weekly economic bulletin. The eurozone National Bank economic analysts have calculated that the economic slowdown in the eurozone still has some way to go before becoming fully fledged. It thus does not seem out of place to shift the period when recovery can reasonably be expected to the second quarter of 2002. Until then, growth will remain at low levels, influenced in large measure by the slowdown in the US economy. Alpha Bank analysts share similar views, estimating that the growth rate of the global economy will be limited to 1.2 percent in 2001 and 0.7 percent in 2002, against 4.6 percent in 2000. Greater uncertainty leads to a higher risk premium, said Bouloutas, stressing that investors have to take into account that the present is worth more than the future and that options will therefore be determined by developments in the short term. Platon Monokrousos, Eurobank’s chief economist, points out, nevertheless, that the eurozone is much better-placed that the rest of the world, being well-balanced in its external trade and not relying heavily on capital inflows. Provopoulos adopts a more optimistic view: A widespread sense of improvements at organizational level and rising investment expenditure, bolstered by preparations for the Olympic Games of 2004, and the unprecedented fiscal and currency stability, are elements mitigating against the crisis. Better utilization It is, nevertheless, difficult to claim that the growth rate of the Greek economy will be higher next year than in 2001. No Greek analyst puts it at more than 4 percent. Even IMF’s 3.8-percent forecast for 2002 is considered difficult to attain. The possibilities of unpredictable political and military developments and an upheaval in the oil market make the pessimistic scenario more likely. It will not be at all easy for Greece to maintain such a large difference from the average rate forecast for the eurozone, notes Mylonas. Xafa sounded a note of warning. Since we cannot rely on outside growth, we must put our domestic resources to better use, she says. The spending of 1 trillion drachmas to protect jobs in Olympic Airways would have multiple beneficial effects if spent to bolster incentives for business restructuring. Provopoulos cites an OECD estimate according to which the deregulation of large markets such as energy and telecommunications will add 5 percent to the Greek domestic product. Summing up for stock market investors in particular, Bouloutas estimates that the Greek market can present opportunities during 2002 if the P/E ratio ends up lower than 13.4 on the basis of an average 5.7-percent rise in profits (after the projected 4.3-percent fall in 2001) and the expected attractive 3.8-percent dividend return on Greek stocks. The overall picture emerging from analysts’ views may have obvious shades of gray which are unlikely to turn black, provided the Greek economy taps into the advantages gained by its differential stage of development, and that structural changes are promoted.