Greek Economic Outlook
Gikas Hardouvelis
Economic Chamber of Greece, The Greek Economy After The Closing of the 3rd Adjustment Programme
May 31, 2018
Synopsis:
The presentation at the Greek Economic Chamber of Commerce on May 31, 2018 addressed two key questions:
- What is the reason behind the long Greek stagnation?
- What is the way out of stagnation?
Briefly,
The answer to question (i) is found in the extra phase II of the Greek crisis, which prolonged the crisis unnecessarily by at least an extra three years. Phase II was not driven by any previous economic imbalances, but rather, it was purely political in nature.
The answer to question (ii) is more complicated and exit from stagnation would occur if
- Government credibility comes back
- Incentives for work and innovation reappear in the country
- The tax and pension contribution structure is cured
- Reforms continue (privatizations, bureaucracy reduction, rationalization of the public sector, liberalization of energy markets, etc.)
- Banks manage to survive and provide fresh credit
