Greek Businesses Getting Back on their Feet
For the past ten years, we have heard several reports and announcements that the Greek economy has collapsed. As we begin a new decade, things seem to be picking up for Greek businesses. New data produced by the Athens Stock Exchange highlights that the recovery for some Greek businesses started a while ago. The problems of the Greek economy have been mainly attributed to the abysmal performance of its financial services sector, mainly banks.
One of the positive indicators is the fact that market capitalisation at the Athens Stock Exchange rose by 47% in 2019. This is the biggest increase in the world and Greece’s best performance ever. A stock market growth trajectory is positive news for the Greek economy. In a nutshell, it means that Greek businesses are attracting investors after a lengthy dry spell.
In the past years, banks made a number of efforts to reduce their non-performing exposures. With that said, smaller banks are still struggling. One example of a strong bank in Greece is that of Eurobank, which managed to reduce its non-performing exposures from 40% to 15%.
The concept of reducing non-performing exposures which has enabled banks to lend again has had a strong positive impact on the economy. The economic depression which took place within Greece seems to be easing and now sees fewer loan defaults and steadily increasing deposits. These are positive signs in the steps towards a healthy and sustainable economy.
Greece had suffered a double-dip recession which it is now slowly recovering from. The recovery can be recorded from 2015 onwards. One of the reasons for this was the fact that the Syriza government agreed terms on the third bailout and won the election. This was coupled with the European Central Bank’s quantitative easing program.
The fact that the Greek economy is recovering is good news. It is now attracting increased foreign investor activity which bodes well. If the bank clean-up continues to improve, such institutions may be in a better position to spur growth for businesses.
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