OECD Economic Surveys: Greece

Every 18 months
1999-0286 (en ligne)
1995-3224 (imprimé)
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OECD’s periodic surveys of the Greek economy. Each edition surveys the major challenges faced by the country, evaluates the short-term outlook, and makes specific policy recommendations. Special chapters take a more detailed look at specific challenges. Extensive statistical information is included in charts and graphs.

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OECD Economic Surveys: Greece 2011

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02 août 2011
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9789264093492 (PDF) ;9789264093478(imprimé)

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This 2011 edition of OECD's periodic survey of the Greek economy includes chapters covering fiscal sustainability, structural fiscal reforms, and labour and product market reforms.
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  • Basic Statistics of Greece (2010)
  • Executive summary
    Greece has embarked on an ambitious adjustment programme to deal with the deep economic crisis by restoring sustainable public finances, competitiveness and the foundations for healthy and solid long-term growth. The economic adjustment plan is being implemented with the technical and financial support of the IMF, the European Union and the ECB, and – as announced on 21 July 2011 – the participation of Greece’s private creditors. It aims at tackling the root causes rather than the symptoms of the crisis.
  • Assessment and recommendations
    Greece has embarked on an ambitious adjustment programme with financial support from EU/IMF/ECB (Troika), and, as announced on 21 July 2011, with participation of Greece’s private creditors. Measures are needed to reverse the debt build-up, to restore competitiveness, reignite sustainable growth based on investment and exports, and to regain access to international capital markets. In 2009, the fiscal deficit had ballooned to over 15% of GDP reflecting uncontained spending, a collapse in tax revenues and the onset of a recession, while public debt reached 140% of GDP in 2010. In addition to fiscal imbalances, external imbalances also widened and total net foreign debt, both public and private, rose to 105% of GDP in 2010.The dire economic situation was magnified by lost credibility as serious deficiencies in statistical monitoring of government accounts were exposed.
  • Restoring fiscal sustainability and promoting sound and solid growth
    Over a year after a fiscal crisis and the beginning of IMF/EU/ECB support, Greece is still in a serious recession. The sizeable, but vital, fiscal retrenchment, has significantly reduced its large budget deficit. Considerable advances have also been made with structural reforms both in the public sector and in labour and product markets. Despite this progress, persistent market scepticism concerning the capacity of the country to restore sustainable public finances and to renew economic growth has left sovereign interest spreads at record highs. Against this background, this Survey offers an assessment of the Greek economic situation, its outlook, and the progress achieved with reforms. To understand the source of the problems, this chapter examines the causes and the scope of the macroeconomic imbalances that Greece must correct, including developments after the introduction of the adjustment programme. It then assesses the strategy underlying the economic adjustment plan and discusses the risks associated with the reform process.
  • Sustainability cannot be achieved without structural fiscal reforms
    The 2010 fiscal deficit was reduced mainly through across-the-board tax increases and cuts in civil service pay and pensions. Although these measures still have some role to play, for example in restraining public sector employment, social and equity considerations make their use more difficult going forward. Moreover, as is the case with higher tax rates, such measures cannot induce a lasting shift in government spending and revenue unless they are repeated frequently, which would be harmful for growth. Another drawback of these across-the-board measures is that they are of little use for enhancing the quality of public spending, which is also an important challenge for the authorities. The pursuit of fiscal consolidation must henceforth rely primarily on structural reforms to the public sector, such as those included in the government medium-term fiscal strategy. These are necessary to produce a high and sustainable primary fiscal surplus and to improve public service quality, which is indispensable for resolving the crisis and which will require considerable effort in a great many areas.
  • Structural reforms to support growth
    Generating jobs and growth are key goals of the adjustment program. The recent decline in wages indicates some responsiveness of the labour markets to economic conditions, but persistent and large structural unemployment, especially among vulnerable groups, and loss of competitiveness, point to important impediments. Productivity is also undermined by weak competition, high rents and red tape. A wide range of structural reforms are now underway which promise to raise living standards and employment, and to make labour and product markets more inclusive and fair. Active labour market policies are improving job-search possibilities. Lower minimum wages for youth, improved wage bargaining, and revamped employment protection rules should enhance job creation. Reforms in product markets are improving the competition framework and the business environment, and barriers to exports and investment are being reduced. Deregulation, now underway in a long list of closed professions and the road freight sector, should increase economic dynamisms and end unfair restrictions. The reforms undertaken are improving notably Greece’s ranking in OECD product market indicators and strengthen the adjustment capacity of the labour market, and estimates show a potentially large impact on growth over time (Chapter 1). It is important to systematically monitor the implementation of the reforms and their impact. High-quality data to assess the reform process are essential in this regard. Such data are also needed to convince international observers and the Greek people that reforms are paying dividends.
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