Recovery is fragile, Parliament's Budget Office warns

Greece's return to the markets on Tuesday constituted a positive sign, but if reforms are not continued and the third bailout review is not swiftly concluded the country risks sliding back into recession, with social tension and more problems in obtaining financing from the markets, the economists of the Parliamentary Budget Office warned on Wednesday.

In its quarterly report the PBO estimated the economy would grow by 1.5-1.6 percent this year, undercutting the government's estimate (1.8 percent) and stressing that the apparent rebound is fragile: "To make it clear, [the recovery] will be interrupted if the country leaves the path of reforms. The same will occur in case of political instability," the PBO economists argued.

They did note that tapping the markets could be interpreted as a move expressing the government's intention to fulfill its existing agreements (the...