Athens wants to pay off its national debt faster. This was announced by Prime Minister Kyriakos Mitsotakis. According to economist Hein Roelfsema, this makes the Greek economy, which he says is in better shape than often thought, even more attractive to investors.
Greece has a national debt of 356 billion euros. At 171 percent of GDP, which is the highest in the euro area. And the recently re-elected Prime Minister Mitsotakis wants to change that. In the next two years, at least 5.3 billion will have to be removed.
‘Greece has done well if you compare the evolution of public debt with other Southern European countries’
According to Roelfsema, an international economist at Utrecht University, this is another step in the right direction. “Because Greece has done quite well in the past,” he says. “Especially if you compare the trend of public debt with that of other southern European countries such as Italy and Spain”.
Better credit rating
According to Roelfsema, with this announcement the Greek prime minister aims to improve the creditworthiness (or credit rating) of the country. This is necessary to be able to borrow at lower interest rates. “And this step can really help with that,” he says. “After a few months there may already be an increase in creditworthiness.”
The economist cites private debt as a reason for his optimism. ‘It’s very low in Greece, while it’s high in the Netherlands. Often we only look at the public debt’.
Greece could use a lot of investment
In any case, it is a positive development if investors can find Greece again. “Because a lot of investment is needed,” says Roelfsema. He is referring to the train disaster in Greece this spring. That is why this signal is important. So that large companies in Greece and even state-owned companies can borrow at lower interest rates.’
Source: BNR
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