Ministry of Finance General Accounting Office

The Current Situation of the Greek Economy

Athens, April 11th, 2014

Macroeconomic and fiscal developments

Recession weakened markedly in 2013, reaching -3.9%, slightly less pronounced than what was expected (-4.2%) Current account deficit has disappeared, with a surplus of 0.7% of GDP in 2013 Fiscal targets were exceeded in 2013*: A primary surplus of 1.3% of GDP occurred for the first time in decades (the target was for 0% of GDP) General Government deficit has been reduced to 2.6% of GDP (below the threshold of 3% of GDP)
* European Commission, Fourth Review, March 2014

Programme implementation
Financial sector conditions are steadily improving Two out of the four systemic banks have successfully re-gained market access for capital increases The taxation system and the revenue administration have been greatly reshaped Significant progress has been achieved in public financial management Steps are being taken to reinforce the effectiveness of the privatization process The rationalization and modernization of the public administration advances further Substantial progress has been achieved in the reform of the pension system A comprehensive structural reform agenda is taking place in the health and energy sectors, the judicial system, the labor and product markets

Recession is decelerating
GDP percentage change (y-o-y, 2005 prices) Quarterly GDP percentage change (y-o-y, 2005 prices, non-seasonally adjusted data)

Unemployment dynamics are slowing down

Annual unemployment rate (%) Monthly unemployment rate (%)

Unemployed persons monthly rate of change (y-o-y, % change)

Inflation is decreasing
Harmonized index of consumer prices (Greece and A17, monthly data, y-o-y, % change, 2009-2014)

Economic sentiment is improving

Economic sentiment indicator (Greece and A17)

Structural reforms are realized

Change in responsiveness to Going for Growth recommendations across OECD countries, 20112012

No.1 in the Lisbon Council, 2013 Euro Plus Monitor, Adjustment Progress Indicator
2013 1 2 3 4 5 6 6 8 9 10 11 Rank 2012 1 2 5 4 6 3 10 7 8 12 11 Country Greece Ireland Spain Portugal Slovakia Estonia Cyprus Poland Italy UK Slovenia Euro Area 17 Total Score 8.6 7.7 6.9 6.7 6.3 6.2 6.1 5.0 4.6 4.6 4.3 4.2 External Adjustment 6.8 8.7 7.6 7.1 7.7 7.2 7.1 5.4 4.4 3.9 6.5 4.3 Fiscal Adjustment 9.6 5.6 6.5 6.7 7.2 2.2 4.1 6.2 6.5 5.0 5.2 5.0 Labour Cost Adjustment 8.3 8.4 5.7 5.3 4.9 6.6 7.2 2.2 2.5 3.7 3.3 2.5 Reform Drive 10.0 8.2 7.7 7.7 5.5 8.8 n.a. 6.1 5.2 5.8 2.2 5.0

Business environment is improving

Remarkable improvements in certain areas World Bank 2007
100 152 158 84 42 93 86 65 87

2008
96 133 150 109 45 101 62 70 85

2009
109 140 154 87 50 107 76 80 89

2010
109 149 154 89 51 153 74 84 88

2011
100 135 155 78 41 150 83 84 90

2012
78 146 117 83 31 150 56 62 87

2013
72 36 80 86 66 161 53 52 98

World Economic Forum IMD

Ease of Doing Business Starting a Business Protecting Investors Getting Credit Dealing with Construction Permits Registering Property Paying Taxes Trading Across Borders Enforcing Contracts

Global Competitiveness Index 65/130 67/134 71/133 83/139 90/142 96/144 91/148 Overall Competitiveness Economic Performance Government Efficiency Business Efficiency 52 52 53 49 46 48 54 45 56 58 56 53 58 58 58 56 54 59 56 47

Privatizations proceeds come in

Receipts from privatizations (EUR million)
Privatization
20112012 1 OTE 10% stock sale 2 3 4 5 2013 6 7 8 9 10 11 12 Sale license to install and operate gaming machines (VLTs) Contract extension between the Hellenic Republic and OPAP for 10 years Granting rights to use radio frequencies in 900 MHz and 1800 MHz Sale 2 Airbus aircrafts of ex-Olympic Lease for 90 years of the building of the International Broadcasting Centre (IBC) Sale of State Lottery licenses Sale of selected real estate property abroad OPAP 33% stock sale DESFA Sale and leaseback of selected public real estate Other assets (real estate, stocks, etc.)

Total receipt
392 560 375 381 16 81 770 41 652 188 261 84

Already paid
392 560 375 317 16 81 190 27 622 0 0 36

Total

3,801

2,616

10

Current account deficit has disappeared

Current account balance, annual 20112013 (EUR million)

Surplus recorded after decades

11

Borrowing cost is decreasing

10Y GGB spread, 2009-2014

26W T-Bills yield

13W T-Bills yield

12

Gradual market access successful after 4 years

5Y GGB issuance characteristics, 2007-2014

13

Fiscal targets were met by a sizeable margin

General Government balances for the period 20122014 (EUR billion and % GDP)
1

Economic Adjustment Programme methodology

2012 Outcome

2013 Estimation

2014 Forecast

General Government balance % GDP General Government primary balance (Economic Adjustment Programme targets) (Economic Adjustment Programme targets)
1

-12.7 -6.6 -3.0 (-2.9) -1.5 (-1.5) % GDP

-4.7 -2.6 2.4 (0.0) 1.3 (0.0)

-5.4 -3.0 2.7 (2.7) 1.5 (1.5)

14

European Commission, Fourth Review, March 2014

Fiscal performance above Euro Area average

Primary balance (Greece and EA17, General Government, % GDP)

Cyclically adjusted primary balance (Greece and EA17, General Government, % GDP)

15

Arrears are being repaid

General Government arrears repayment procedure (EUR million)

16

Debt/GDP ratio is projected to decline

General Government debt (EUR million and % GDP)

17

Debt characteristics have improved

Average residual maturity of Central Government debt
Average maturity in years Date 31.12.2010 31.12.2011 30.12.2012 30.09.2013 Debt in EUR currency 7.21 6.38 15.72 16.71 Debt in other currency 3.34 3,21 2.36 3.92 Total debt 7.14 6.30 15.29 16.17

Interest expenditure of Central Government debt (EUR million and % GDP)

18