Caution would be more advisable

Caution would be more advisable

Efforts to cultivate optimism are welcome, given the fact that positive public sentiment is a required condition for economic growth. That said, Greek government officials should be reserved in their forecasts.

Moderation is especially necessary at a time of unprecedented geopolitical and economic volatility around the world, because there should be no doubt that the international environment holds many risks and the short-term (and likely long-term) future of the Greek economy depends largely on developments unfolding around us. For this reason moderation should be the guide of those making overoptimistic predictions about Greece’s economic growth. 

A painful demonstration of how volatile the economic environment is – leaving aside potential geopolitical developments in the wider region – was the sudden bankruptcy of the world’s oldest travel company, Thomas Cook. Just the fact that the British tour operator brought around 7.5 percent of incoming tourism to Greece each year indicates that the company’s failure could have significant consequences for our country’s biggest industry. Tourism enterprises across Greece that have been hit by Thomas Cook’s collapse will hopefully react in a cool-headed and professional manner, also with the help of state authorities. Business, after all, comes with risk. 

So it’s hard to say where all the optimism of government and other officials is coming from, but, experts as they are, they ought to take into consideration that Germany, the economic powerhouse of Europe, has seen economic growth contract to 0.7 percent and if the trend continues then the German economy could slide into recession. German officials have already announced measures to deal with the situation but every reasonable observer would expect that other European economies, including Greece’s, would be affected by a German downturn. 

Brexit is another major challenge. Most media reports focus on the impact that an exit from the European Union (particularly a no-deal Brexit) would have on Britain, but the repercussions will to some degree also be felt in the bloc.

Add to the mix the until-now peaceful US-China trade war, a potential US-EU standoff in the future, and the sanctions fired off by US President Donald Trump in almost every direction. 

Finally, there are fears of further conflict in the Middle East, not that far from Greece. A possible full-scale war centered on Iran would have catastrophic consequences for Europe and therefore also for Greece. Oil prices would hit the roof, Turkey would find an opportunity to unleash its aggressiveness and the migration crisis would spin out of control. 

Greek officials would do well to restrain themselves.

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