World, Economy, Europe

Financial woes in Greece 'call for more debt relief'

Organization for Economic Cooperation and Development releases new report on financial situation in Greece

Financial woes in Greece 'call for more debt relief'

By Idyli Tsakiri

ATHENS, Greece

The financial situation in Greece “calls for additional debt relief,” according to a new report by the Organization for Economic Cooperation and Development (OECD) published Monday.

Growth in Greece will gain strength in the next two years and employment will rise, but unemployment will remain “far too high,” states the economic forecast for the country.

“Growth has rebounded in the second half of 2016 and is projected to gain strength in 2017 and 2018 as structural reforms start to bear fruit,” said the OECD.

However, “the huge public debt undercuts confidence in the Greek economy, a situation that calls for additional debt relief. Even if the ambitious medium-term fiscal targets established in the 2015 agreement with creditors were met, more should be done to make public debt clearly sustainable.”

According to the forecast, “the high level of non-performing loans undermines credit growth, holding back investment.”

As a potential solution, the OECD suggested that “the authorities should implement already legislated incentives and performance targets for banks to monitor their progress in reducing bad debt.”

The report was made public on Monday, the same day that Pierre Moscovici, European commissioner for economic and monetary affairs, began a two-day visit to Athens.

The commissioner will meet later Monday with Prime Minister Alexis Tsipras, as well as with the finance and economy ministers to discuss the country’s bailout program implementation.

According to the website Trading Economics, Greece’s government debt is over 176 percent of its GDP, while unemployment is higher than 23 percent.

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