Greece’s recovery unlikely to last

While the spotlight is on Italy and France, the country at the centre of the first eurozone debt crisis has been largely ignored in the last few months. But that could change in 2019.

For now, things don’t look too bad. In August, Greece exited its third multibillion bailout programme in eight years. Since the financial crisis there has been some economic progress.

The recovery remains on track after a recession that shrank the economy by a quarter. Greece’s GDP grew by 1% between July and September as the economy expanded for a ninth consecutive quarter, mainly driven by stronger consumer spending. Unemployment, which peaked at 28% in 2015, has slipped by 10%.

Still, there is a long way to go, as Anna Isaac points out in The Sunday Telegraph. A third of the population lives beneath the poverty line, and youth employment is 40%. The debt burden of 180% of GDP remains unsustainable.

While the government is in surplus for once, growth projections look over-optimistic and the administration will be tempted to offer plenty of giveaways in the run-up to the election in the autumn, says Capital Economics. Greek bond yields could rise sharply amid a stand-off with Brussels. “It really is a matter of time,” Ángel Talavera of Oxford Economics told The Sunday Telegraph, “before the crisis in Greece flares up again.”