Tieless But Clueless
The Telegraph reports on what the election of an Syriza-led government has done for the prospects of economic growth in Greece.
Bail-out uncertainty plunges Greek economy back into turmoil
European Commission slashes its growth forecasts warning political risks could cripple Greece
2:30PM BST 05 May 2015
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Greece's beleaguered economy has had its growth forecasts slashed, as the debt-stricken country is set to return to its position as the eurozone's laggard, according to the European Commission.
Despite briefly holding the title of the eurozone's fastest growing economy at the end of last year, the election of its radical Left government has thrown Greece back into turmoil, warned the EC's spring forecast.
High unemployment, stubborn deflation and weak investment will see GDP grow by just 0.5pc in 2015, from an earlier projection of 2.5pc, according to the Commission's latest healthcheck on the eurozone.
Greece's debt mountain is now expected to balloon to more than 180pc of GDP, compared to the initial projection of 170pc.
The economy managed to expand for the first time in seven years in 2014, but any positive developments have been wiped out by ongoing political uncertainty over its future in the eurozone, warned Brussels.
"The positive momentum has been hurt by uncertainty since the announcement of snap elections in December," said the Commission.
The EC's forecast for Greece, which only takes in developments until April 21, is contingent on a number of optimistic forecasts about the country's three-month debt stalemate.
Should a reforms-for-cash deal finally be agreed, Greece could hit a budget surplus of 1.8pc this year, substantially lower than the optimistic 4.8pc projected earlier this year.
However, analysts have warned that anaemic growth make any surplus target highly ambitious, particularly if the economy falls back into recession in 2015.
