The Greek economy is moving "to nowhere"

Greek Economy Seems to be Going 'Nowhere' as Agency 'Slap' Shows Moody's, which did not improve the country's credit rating and left it outside the investment grade.

The famous financial house limited itself only “increasing” the forecast from “stable” to “positive”, which was done solely for geopolitical reasons, in order to support the Mitsotakis government, since it is now fully serving the interests of the WestA new assessment is reported to be given in 18 months.

In 18 months, the war in Ukraine could be over and the Mitsotakis government will have accomplished its task. That's exactly what he thinks Moody's, which explained in its report why it did not assign the country an investment rating.

«Long-term challenges to potential growth arise from unfavourable demographics, which will only be partially offset by the expected positive impact of the Recovery Fund's investments and productivity-enhancing reforms.”

Although the investment house expects Greece to continue to significantly reduce its debt, the debt-to-GDP ratio will remain above 120% until the 2030s, which is high compared to other countries in the world.” In short, the investment house argues that the country's debt is so large, and will remain so large even if it is reduced (sometime in 2030), that no self-respecting house cannot assign it an investment rating.

He adds that “to sweeten the pill” some wishes like that by 2030 it will decrease to somewhere around 120%which even then would be considered one of the highest rates in the world.

But he mentions something else very important: demography. Population of the country is being reduced at an unrealistic rate, which means that it cannot have a bright economic future, or any future at all.

In its report, the House of Representatives emphasizes that the country relies on consumption and services. In other words, it produces nothing. Demography is a serious problem for a country that wants to produce, but it is an equally serious problem for a country that wants to consume. Fewer people means less consumption, which means less income for the government to continue paying off its exorbitant debts. Therefore, if demographic and production problems will not be solved in some “magical” way, the country will have no hope left.

Moody's itself reported that some positive effect had been achieved thanks to the Recovery Fund's investments. But this financial resource will cease to exist in 2025. If Greece achieved relatively low growth rates with this instrument, what will happen when it ceases to exist?

In addition, the tourist model (expecting tourists every summer to fill the “holes” in the budget)seems to have hit a ceiling because further development requires a lot of new infrastructure, which will take many years to implement.

If you look closely at what the financial house writes, you will see that the only thing it expresses real satisfaction with is the banks. And why not do it, since they are sold to foreigners and do not need financing, since in the past it was done by Greek taxpayers, whether they wanted it or not.

Greek taxpayers paid over 50 billion euros (let's not forget), and the Greek government received about 4 billion euros from the sale of shares in systemic banks held by HFSF.

Of course, pro-government media are trying to present the Moody's report as something extraordinary. But, as always, there is embellishment of reality and, of course, reality itself, which is also inexorable…

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