Some Costa Rican business leaders and employers are nervous over the possibility of another financial crisis in the United States and Europe.
Among these are officials of the Cámara Costarricense de la Construcción. Ricardo Castro, president of the organization, told a group that the purpose of financial resources is to be a means of production and for the welfare of the people, not as an end or instrument to generate riches in itself.
He said he hoped that the international crises would help reduce the cost of prime materials that would allow Costa Ricans to improve the infrastructure and its competitivity.
He also estimated that the proposed 14 percent value-added tax now in the legislature would increase the cost of a home from 9 to 12 percent. He said the impact of the proposed tax plan was a great concern for the country.
Meanwhile Aldesa, the financial services firm, issued a report that said that a new wave of international problems would affect the real estate market here as well as the country’s ability to borrow money. It warned that uncertainty and a deterioration of the government’s finances would generate a process of dollarization in Costa Rica.
Monday U.S. stocks followed European and Asian markets into the red after Greece announced it will miss deficit reduction targets worked out in a bailout deal with lenders. Despite a series of austerity measures, the Greek government projects its deficit at 8.5 percent of the country’s economic output, well above the 7.6 percent target it had promised international creditors. The admission renews fears that Greece may not get the crucial assistance it needs to avoid default.
The possibility that Greece will not make good on its debts moved a step closer to reality on Monday. At a eurozone finance ministers meeting in Luxembourg, EU Monetary Affairs Commissioner Olli Rehn said Greece and the 17 nations that use the euro have reached a critical juncture.
“It seems that Greece is likely to miss the target this year, next year and concrete measures agreed to so far are going a long way to meet all the fiscal targets,” said Rehn. “As I said, it is essential now that we will assess the measures, we will review the figures.”
Greece’s next bailout installment — about $11 billion — is predicated on the country’s ability to reduce spending — spending that has raised the country’s debt load to a staggering 173 percent of national income. Without the next installment, Greece is expected to run out of money in a matter of weeks.