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2011 OECD Economic Surveys: Greece 2011

image of OECD Economic Surveys: Greece 2011

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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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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