Paolo Fioretti, the head of the ESM for Greece, estimates that the recovery of investment grade for Greece is possible in 2023, probably in the second half.
Speaking at the Economist conference, Mr. Fioretti noted that today it is better to talk about Greece than about his country, Italy, where challenges are greater.
At the Economist conference, all three representatives of the “institutions”, from the ESM, the ECB (Martin Bijsterbosch) and the EU (Julia Levanti), where the faces have changed after the exit of Greece from enhanced supervision, made their opinions known. All three agreed that fiscal stability, the continuation of structural reforms and the acceleration of the procedures for reducing non-performing loans while simultaneously creating capital buffers on the part of the banks are “keys” to better deal with the crisis.
According to Paolo Fioretti, the basic scenario predicts growth for Greece in 2023 as well, although there is also an unfavorable scenario of a mild recession, which cannot be ruled out.
“The Greek economy is recovering as it entered the crisis from a better fiscal position which allowed it to take support measures while structural reforms made the economy more resilient,” he noted during his speech. At the same time, welcoming the government’s commitments to return to primary surpluses in 2023, he argued that a primary surplus of 1% in 2023 means that there will be no additional fiscal space for extra support measures and in this light, fiscal space may need to be saved this year in order to have margin for next year.
