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Greece needs wide debt relief to avoid permanent depression, thinktank warns
Source: The Guardian
Greece needs wide debt relief to avoid permanent depression, thinktank warns
NIESR claims that a haircut of 55% on Greek debt is needed to give the country a
chance of reducing its debt to 120% of GDP
Larry Elliott Economics editor
Wednesday 5 August 2015 00.01 BST
Greece’s economy will suffer fresh damage from the austerity measures demanded by its creditors and will remain stuck in permanent depression unless it receives substantial debt relief, one of the UK’s leading thinktanks has warned.
The National Institute of Economic and Social Research said the increases in VAT reluctantly accepted by the Syriza-led coalition in Athens in exchange for a new bail out will result in a 1% fall in national output in 2016.
In its quarterly analysis of the state of the global economy, NIESR said that by the time the Greek economy stops contracting in the middle of next year, gross domestic product would be 30% lower than at the start of the crisis in 2010 and 7% lower than when the country joined the single currency in 2001.
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NIESR claims that a haircut of 55% on Greek debt is needed to give the country a
chance of reducing its debt to 120% of GDP
Larry Elliott Economics editor
Wednesday 5 August 2015 00.01 BST
Greece’s economy will suffer fresh damage from the austerity measures demanded by its creditors and will remain stuck in permanent depression unless it receives substantial debt relief, one of the UK’s leading thinktanks has warned.
The National Institute of Economic and Social Research said the increases in VAT reluctantly accepted by the Syriza-led coalition in Athens in exchange for a new bail out will result in a 1% fall in national output in 2016.
In its quarterly analysis of the state of the global economy, NIESR said that by the time the Greek economy stops contracting in the middle of next year, gross domestic product would be 30% lower than at the start of the crisis in 2010 and 7% lower than when the country joined the single currency in 2001.
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Read more: http://www.theguardian.com/business/2015/aug/05/niesr-warns-on-further-greek-austerity