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Greece seen topping EU economic growth list next year
February 5, 2015 / 2:33 PM / 3 years ago

Greece seen topping EU economic growth list next year

BRUSSELS, Feb 5 (Reuters) - Greece’s economic growth rate will be the highest in the European Union next year, the European Commission has estimated, although its optimism is based on the assumption that Greece sticks to its bailout commitments.

Greece’s economy returned to growth in the second quarter of 2014 after six years of recession, expanding by 1.0 percent over the year, the Commission said in its latest economic forecasts released on Thursday

The Commission sees 2015 growth of 2.5 percent as lower oil prices and higher disposable income boost private consumption and exports, notably tourism and shipping, prosper from the weaker euro and increased competitiveness.

The Commission also forecast that Greece’s economy would expand by 3.6 percent in 2016, a rate matched only by Ireland and Latvia.

Then it sees investment expanding by 15 percent, assuming structural reforms are carried out.

The Commission’s report added that there were risks to its forecasts, with political uncertainty threatening to undermine confidence, consumption and investment.

The new, left-wing Greek government wants to renegotiate its 240 billion euro ($274 billion) bailout and ease austerity measures imposed by international lenders, but has received a cool response even from left-leaning governments in France and Italy.

European Commission Vice President Valdis Dombrovskis told Reuters that the new Greek government’s policies, such as halting some privatisations and planning to raise the minimum wage, may not have the desired positive effect and risked drawing the country back into crisis.

“Greece is one of the fastest growing EU economies now,” he said in an interview. “They are back to economic growth and job creation and they have ensured financial stability.” ($1 = 0.8755 euros) (Reporting By Philip Blenkinsop; Editing by Toby Chopra)

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