Don't bet on Greece's exit from recession: Business leader
Greece might be confident that it will exit six years of recession in 2014, but the president of the Athens Chamber of Commerce warned the country's economic outlook remained worrying.
A draft budget forecast on Monday said that Greece could finally emerge from six years of recession that were brought on by the financial crisis. It confirmed it would post a budget surplus before interest payments this year for the first time in over a decade.
The budget also predicted the economy would grow by 0.6 percent next year thanks to a rebound in investment and exports including tourism.
The figures might appear modest but for Greece, they represent a glimmer of hope after six years of recession brought on by the financial crisis. Since 2010, it has relied on two 240 billion loans from international lenders on the condition that the Greek government impose tough austerity measures on the people, including widespread government spending cuts and tax hikes.
Unemployment is still the highest in the euro zone too, with more than one in four people without a job although for the first time in almost four years, the unemployment rate fell to 27.1 percent in the second quarter of 2013, from 27.4 percent in the first quarter.
(Read more: Greece's problems are still Germany's problems)
Costas Michalos from Athens' Chambers of Commerce said that although things were improving, there was a long way to go before Greece could inspire confidence among foreign and local investors.
"The situation is much better both from the political angle and the real economy than it was a year ago. However, as far as reforms are concerned, particularly concerning privatization, we really need to move forward in quicker steps than we're doing at the moment," he told CNBC Europe's "Squawk Box."
"If you don't provide the necessary confidence level that is required for potential foreign investors to come in by showing the example yourself through public investment [then investors will never come]." Michalos said that the Greek government had slashed its public investment In order to get a primary surplus this year and this was a "bad sign."
Despite Michalos' warnings, Greece has attracted foreign investment from companies looking to profit from the government's enforced sale of state assets. Billionaire investors John Paulson and a clutch of bullish U.S. hedge funds are leading a charge into Greek banks, confident that Greece, long seen as the weakest economy of the euro zone periphery, was on the turn.
Michalos dismissed such investment, however. "With all due respect, John Paulson and other foreign investors may be putting funds into the Greek banking system but the taps are closed completely. The system is stagnant…and there is no serious liquidity in the market."
(Read more: Greece's Piraeus Bank warns of rising bad loans)
Greece's debt pile is still the largest in the euro zone and is set to top 175 percent of gross domestic product this year. The government has little option but to raise revenues through further unpopular taxes on a struggling populace. Despite "extremely" high taxation levels, Michalos said Greece had no tax auditing mechanism capable of bringing in the necessary taxes to send a message of stability to investors, however.
"Expenditure is slowing coming down but we don't have a tax system that has a time base of at least 5 years that passes a message of stability to foreign and local investors. In combination with the major, major problem in the Greek economy which is liquidity, those are the two major issues that need to be resolved."