Rebuilding confidence in Greece will not be achieved by continuing to make swingeing cuts, according to Lesley Batchelor, director general of the Institute of Export.

As the European debt crisis continues to escalate with Greece on the edge of economic collapse, the director general said although it's too early to predict the outcome of the crisis, slashing pensions and government spending on jobs merely reduces the available money in circulation.

Coupled with this, she said, is the issue of kickbacks and the level of corruption in a country whose black economy has grown from 33% to 37% of GNP in the last 12 months.

Batchelor added: “So what can really be done? Our Bribery Act is not proving too successful but it does highlight the need to fight corruption.

"Intellectual Property is likewise being stolen with over 10% of Greece's population being illegal immigrants who, unable to access state welfare, resort to petty crime, selling rip-off merchandise and creating a street trade of around 15 billion euros a year.  

"All this has an adverse knock on effect and begs the questions of how confidence can be rebuilt in a country which is being told to make even more cuts that affect the poor, whilst the rich continue to avoid paying taxes?

"Restoring confidence goes deeper than just stopping any expenditure – which in turn stops sales. Such actions will not stimulate the growth that is needed to start paying off these loans."