Moody’s Warns Greece of Risks

In a post mortem of the era of bailouts, ratings agency Moody’s highlights the catastrophic impact of the eight years of austerity on the Greek economy and warns economic and political risks could derail the return to normality, GreekReporter reported. “Risks abound for Greeks to lose the ground they have made, like the mythical Sisyphus—who was forced to push a boulder up a mountain every day just to see it roll back down at night,” it says. Its analysis published on August 23, says that eight years of heavy austerity and restructuring of the labor market “wreaked havoc on the Greek economy.” It notes that real GDP fell by a quarter of its 2008 level, the unemployment rate jumped up to more than 25%, and incomes fell by almost a third. As a result, the Greek economy remains far behind its European counterparts. On the positive side Moody’s says that with its string of five consecutive quarterly increases in real GDP, Greece has produced its best run of economic growth since 2005-2006. While growth has been consistent, the sources of growth are much less so: Exports have usually been positive, but consumption and investment have not, it says.