When the eurozone finance ministers released a deal that was set to unlock the other round of bailout money they needed to cover their 7.4 million Euros debt, everything changed for the best.
The new deal of Greece with the EU will give a new hope for foreign investment. Greece is now officially off the list of the EU’s top priority since the crisis has been averted. Although this deal does not close the 7-year old Greek debt saga entirely, it is an important turn of the page for Greece and other eurozone nations.
The deal between the Greeks and European creditors reached this deal after a weekend full of intense opposition and resilient negotiations. This three-year deal worth 8.5 billion Euros in funding is great news for the rest of the world as long as it holds. The reason is that it will help reduce the risk of EU issues that have been slowing the global economy.
A three-year deal for more than 8.5 billion Euros is better than getting a shorter term deal of around 15 billion Euros. The concessions that had been made by Tsipras are just a little bit tougher than what would have been needed to get a lot fewer funds for a shorter period. This is truly a gain for the Greeks, though it is hugely mitigated by all the conditions that will be applied to access all the funds. There is hope that there will be an immediate long-term agreement.
A number of face-saving concessions for the country exist. According to the Summit statement, there may be room for some Greek debts maturity getting lengthened and the interest rates being lowered further. Negotiations for the same are expected to commence once the initial positive review of the program is out. The promise to consider and negotiate on the point isn’t a huge concession although it has symbolic weight. It is also the correct thing to do.
There is a possibility of a 35 billion euro investment money for Greek projects that are spread over five years. This is even though it seems likely that the biggest bulk of it would be money that would otherwise be available via European Union programs.
What This Means for the Greek Economy
All the indicators show that nation is slowly but steadily coming from the crisis after 7 years of recession. It now has all the assets to start attracting foreign investors in different industries, ranging from telecommunications, tourism and energy. After three years of absence, the country has managed to make a capital markets comeback by offering 3 billion Euro, 5-year bonds at 4.625%. This recent comeback on the bonds market is founded on the basis of slow economic recovery forecasts. It can be considered a vote of confidence to show that this country is on the right track.
There are signs of economic recovery, and after the evaluation of Greek reforms, it was concluded that its economy is slowly going back to credibility and stability. Last year, the growth went back with a 1.8% forecast. This year, the government expects a 2.4% growth rate. The tourism industry continues to soar with over 25 million visitors seen in 2017. Also, the unemployment rate has also gone down by 20% after it reached its peak of almost 28% in 2013. More foreign investors in the tourism industry are flocking to this country to take advantage of the improved economy.
NBG securities have released 300 million Euros in the SME industry. There are numerous investment opportunities cropping up in this country, bringing a lot of hope to its citizens. One of the Greek economic pillars is tourism, and currently, it provides numerous opportunities. Also, the banking sector is presenting many opportunities. The real estate industry cannot be ignored as it is also experiencing a lot of growth since the deal was finalised.