Greece enters sixth year of recession

AFP/Athens

Data released last week showed Greece entered its sixth straight year of recession, but there is now cautious optimism about the economy’s prospects although unemployment is still hitting record highs and consumers are squeezed by pay cuts and tax hikes.

On Tuesday, Greece’s battered debt ratings received a rare upgrade from Fitch which noted “clear progress” on eliminating deficits.

Relations with sceptical creditors have been repaired in recent months, permitting Greece to draw successive loan instalments from the eurozone in return for bringing reforms back on track.

Foreign hedge funds are helping Greek banks to re-capitalise after a damaging state debt write-down last year.

And a long-delayed privatisation programme is finally getting off the ground, enabling Prime Minister Antonis Samaras to embark on a four-day journey to China this week in search of new investments.

“We are now more than half the way through to make a real comeback,” Samaras said in a speech at the Chinese academy of social sciences in Beijing.

“I wouldn’t be here if we hadn’t turned in Greece our ship around,” the PM said, noting that Greek bond spreads — the gauge for country risk — have receded by about two-thirds from record levels a year ago.

In 2008, Greece signed with Chinese shipping giant Cosco a 35-year concession agreement to run two container terminals at Piraeus, the main Greek port.