Daily Management Review

Surprising Second Quater Growht for Greece; 1.5% Growth in First Two Quarters


Surprising Second Quater Growht for Greece; 1.5% Growth in First Two Quarters
Astonishing analysts all over the economic world, the Greek economy managed to grow in the second quarter of the current fiscal. The Greek economy, as reported on Thursday, grew by 0.8%, according to an official estimate, amidst all the cacophony of a debt crisis and threats of being thrown out of the Eurozone.    
Given the present fiasco the economy is in, economists had predicted a contraction of
0.5% in the period mentioned above.
This data, when added up with the first quarter data, shows that the debt ridden economy has in fact grown at 1.5 percent in the first six months of the current fiscal year which has astonished many economists.
Greece managed to persuade its international debtors to agree to a bailout package for itself late on Monday night. However the finance ministers of the EU member countries are to ratify the agreement in a voting to be held reportedly on Friday morning.
Under these circumstances, Greek banks will not have any or would have limited access to the bailout funds until a proposal for fresh injection of equity to recapitalize them is taken by the European Central Bank. This is anticipated to take several months.
According to sources cited by Reuters, a stress test for the Greek banks would be finished until the middle or end of October till which time an initial €10 billion form the bailout package would be made available immediately but would be placed in a restricted account.
In case the Greek banks fall short of cash, the European Stability Mechanism will be responsible for distributing the cash.
However as of now there seems no chance for the Greek banks to get any amount to infuse capital as it is reported that the banks are viewed to be maintaining adequate capital up until such time as the full amount of the €25 billion as agreed in the bailout package signed between Athens and its international lenders are made available.
“When the full recapitalization of banks is fulfilled it will have a major impact for the economy, we know that there is around €40 billion euros in cash under the mattresses in the real economy and that money could come (back to the banks) very very quickly," a Greek source reportedly told Reuters.
With limits imposed on the amount that one could take out of an ATM as well as limits to the overseas transfers of money, in a bid to prevent a collapse of the banking system, all of the Greek banks were closed most of July. 
The agreement between Athens and the international creditors was reached on late Monday night and announced on Tuesday, is to be passed by the Greek parliament along with the austerity measures that have been imposed by the lenders on Thursday. It is expected that there could be some opposition to the efforts of the Greek Prime Minister Alexis Tsipras to pass the MOU and the austerity measures from several members of parliament of his own part. The prime minister is hoping to get them passed with help from the opposition.
The passing of the bailout package would ensure that Greece is able to meet the August 20 deadline to repayment of debt to the European Central Bank and thus be able to remain within the Eurozone.
(source: difitallook.com & www.reuters.com) )