Opinion

Hugo Dixon

Is Greece losing its reform drive?

Hugo Dixon
Jun 23, 2014 08:34 UTC

By Hugo Dixon

Hugo Dixon is Editor-at-Large, Reuters News. The opinions expressed are his own. 

Is Greece losing its reform drive? Prime Minister Antonis Samaras has stuck to a harsh fitness programme for two years. But just as it is bearing fruit, he has sidelined some reformers in a reshuffle. There is only one viable path to redemption for Athens: stick to the straight and narrow.

The Greek economy is not out of the woods yet, although the measures taken to balance public finances and restore the country’s competitiveness are having their effect.

Athens partly regained access to the bond markets in April. Banks have been able to issue equity on the markets. The unemployment rate has fallen for four months in a row, albeit to a still terrible 27 percent. The economy has also either just stopped shrinking or will do soon.

Greece’s top industry, tourism, is set to reach new highs this summer following last year’s record. Meanwhile, foreign investors are looking to take advantage of cheap labour, cheap real estate and a better investment climate. Only last week, the Chinese prime minister was in Greece, signing $4 billion of commercial deals and declaring that the country could become China’s gateway to Europe.

A workable euro zone fitness regime

Hugo Dixon
Feb 17, 2014 09:42 UTC

The euro zone has gone from the emergency room to rehab. As often with patients, the question is how to maintain a stiff exercise regime now the immediate danger is over.

Germany has an idea. At December’s summit, it got the rest of the zone to agree in principle to what are called “partnerships for growth, jobs and competitiveness”. The idea is that governments will sign contracts committing them to do things like reform their labour markets, liberalise product markets and improve the efficiency of their public sectors. Countries such as Greece and Cyprus, which are already in bailout programmes, wouldn’t be covered.

The snag is that the leaders haven’t yet been able to agree on what sort of carrot to give countries in return for signing these contracts. They have, though, set an October deadline to reach conclusions.