2019 H2:A new beginning for the Greek economy
Gikas A. Hardouvelis
June 19, 2019
Abstract:
The Greek crisis had two phases, the necessary Phase- I and the unnecessary Phase – II
- Many imbalances were cured in Phase I (Fiscal deficits eliminated,current account deficits shrank, ULC competitiveness restored)
- Yet Phase II prolonged the stagnation, with democratic institutions and the financial sector under threat and the population overlevered and in despair for the future
A jump–start is now required: What are the major challenges ahead?
- Reverse the current disinvestment, which destroys potential growth
- Correct the fiscal mix with incentives for work and creativity
- Restore quality competitiveness with privatizations, public sector reforms, investment in IT & innovation, educational reform
- Help cure the financial sector with a drastic NPE reduction
- Address the population growth & improve social cohesiveness
