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Is Greece finally on the mend after economic crisis?

By Oliver Joy, CNN
updated 6:16 AM EST, Mon November 11, 2013
  • Over a quarter of the Greek population are without jobs and youth unemployment is at 55%, the highest in Europe
  • Since 2010 Greece has received 240 billion euros [$320 billion] from creditors to prevent a sovereign default
  • The European Commission expects Greece to emerge from recession next year and robust 2.9% growth in 2015

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(CNN) -- Greece is on the way to economic recovery as investor faith returns to the recession-ridden eurozone nation, an executive at Greece's largest bank has told CNN.

Petros Christodoulou, deputy chief executive of the National Bank of Greece, said that a drastic drop in government borrowing costs since the outbreak of the crisis in 2009 marks a "great improvement and a great perception of the country" by foreign investors.

Speaking to CNN's Max Foster in Athens, Christodoulou said: "Are we out of the woods with 8% yields in government debt? Not yet, but we are on the right path."

He added: "All this eventually proliferates into everything that happens in Greece, starting from the banking sector which is in the center of the economy and this is good news going forward."

Read more: Euro pioneer: Europe would have suffered without single currency

Christodoulou's comments come in a week of highs and lows for Europe's worst hit nation.

Just seven days ago, Greek stocks, once spurned by investors over fears the country would need to exit the euro, beat every market in the world as the nation's six-year recession eased.

Read more: The birthplace of the euro

While on Tuesday, creditors -- made up of the International Monetary Fund, the European Commission and the European Central Bank -- visited Athens to meet policymakers and assess the country's finances.

Are we out of the woods with 8% yields in government debt? Not yet, but we are on the right path.
Petros Christodoulou, deputy CEO of the National Bank of Greece

The group known as the 'Troika' remains at loggerheads with the government, led by Prime Minister Antonis Samaras, over the country's continued austerity program.

Read more: Spain's call to business

Christodoulou believes Greece is becoming a business-friendly country as banks and the state sell off assets in a bid to raise capital.

He added: "I'm not worried about all this bickering here and there between the government and the Troika. At the end of the day, we've come a long way and we're now at the tail end."

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But the influx of investment is yet to filter down to an austerity-fatigued electorate with over a quarter of the population without jobs and youth unemployment at 55%, the highest in Europe.

Is the eurozone crisis almost over?

Nicholas Spiro, founder of Spiro Sovereign Strategy, told CNN that investor confidence in detached from the economic reality in Greece and largely based on the country's eurozone status being secure.

He added: "The kind of unemployment and the kind of headwinds that Greece is facing are simply too much. It's very difficult to see how Greece is going to stage any kind of meaningful recovery."

Read more: Spain turning back the clock on siestas

On Wednesdsay, two of the country's largest public and private sector unions marched on parliament in a general 24-hour strike against the government's severe cuts to public services.

Christodoulou, second-in-command at Greeks largest and oldest commercial bank, said he wasn't worried by the protests.

Read more: IMF chief's warning to Europe

"It's hardly surprising we've had the odd protest," he added, "you have to look at things in a cumulative way and Greeks have come to accept, in a way, they are resigned to accepting all these measures."

Greece's economic renaissance

This week, the European Commission released its autumn economic forecast, estimating that Greece will emerge from recession in 2014 and projected solid growth of 2.9% for 2015 if the country maintains its current path.

Spiro said that Greece will be "very lucky" to grow next year.

"This is a country that is still struggling to meet the terms of its bailout program," he added, "they have been kicked into the long grass to keep the euro show on the road."

Greece fell into recession after the collapse of U.S. bank Lehman Brothers in 2008, which sparked a euro-wide debt crisis the following year.

Since then the southern European nation has received 240 billion euros [$320 billion] from creditors to prevent a sovereign default on its debt and a possible exit from the 17-nation euro area.

Christodoulou told CNN that the next step for Greece is to reduce state intervention in business.

He finished by adding: "In the old days, we had the Greek state directly or indirectly involved in about two thirds of Greek business, and it's the delight of all Greeks when we see this shrinking drastically now."

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