OECD secretary general Angel Gurria warned of "patches of mild negative growth" in 2012 and called for bold action from leaders attending the G20 summit in Cannes this week to implement the euro region's rescue package "promptly and forcefully". UBS chose to be more direct, cutting its growth outlook for the euro area from 1pc to 0.2pc and saying it was "now forecasting a recession for the first half of 2012". Warnings were also sounded about the global outlook, with the International Labour Organization suggesting that widespread unemployment could spark civil unrest. It claimed that only half the 80m jobs needed over the next two years would be created and that it will take another five years for employment to return to pre-crisis levels. According to UBS, the UK is in a relatively resilient position compared with the eurozone. "After underperforming the euro area this year, we expect GDP growth to exceed the euro area's in 2012," it said. However, it added that George Osborne may have to adjust his austerity programme to hit his targets or accept that he will fail to meet them. "If the economic recovery is as weak as we expect, the coalition Government will have to revise its fiscal plans," the UBS economists said.
Greece has to overcome six obstacles in order to obtain the sixth aid instalment and the new Memorandum of Understanding. The government faces its past failures, intraparty opposition and social unrest, as it is called to implement MoU and October 26 agreements without room for fresh delays. In fluidity of the situation, EU officials speak of Greece’s last chance. New delays would jeopardize the new loan and the sixth installment.
1. Until November 15, the disbursement of the aid installment requires ministerial decisions and interventions that would demonstrate that the medium-term program is under implementation. About 24,000 civil servants would be informed soon about their future, while interventions regarding SOEs, insurance and healthcare system are also required.
2 Troika representatives are expected in Athens in a month for the next audit, while new measures are likely. Privatization program, deregulation of closed professions and reforms in public sector should be accelerated.
3. Completion of the new loan agreements and the new MoU, which should be signed by the end of the year and would determine Troika’s supervision over Greece. The negotiations are anticipated to begin in a month.
4. 2012 budget should be finalized soon, providing forecasts of recession, revenue and expenditure, and including all measures in detail.
5. The new tax bill would be passed by the end of the year.
6. The completion of negotiation with private bondholders. The results would be announce in early 2012.
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