27/11/2013-Greece has made impressive headway in consolidating its public finances and undertaking key structural reforms to boost productivity and enhance competitiveness. These reforms need to be implemented swiftly and in full to put Greece on a path of stronger, more inclusive growth, according to the OECD.
In its latest the OECD says the crisis has been much deeper than expected, leading to a sharp contraction in activity that has pushed unemployment up to almost 28% of the labour force, created hardship for vulnerable social groups, and is posing risks to the sustainability of the country’s government debt.
Presenting the Survey in Athens, OECD Secretary-General Angel Gurría said: “For the reform efforts to succeed and be accepted by citizens, it is imperative that both the costs and the benefits of adjustment are shared fairly. (Read the full speech) ”
He acknowledged that the country’s government debt trajectory has worsened as a result of slower-than-expected growth, despite the 2012 restructuring.
“If Greek growth again disappoints, or deflation persists – even after the implementation of structural reforms - then it will be extremely difficult to reach the debt-to-GDP target of 120% by 2020. In this case, serious consideration should be given to reducing the current debt burden,” he said.
The Survey says accelerating and broadening the structural reform programme is essential for a sustainable recovery. It says privatisations should be speeded up, particularly in the energy sector and in railways, regional airports, ports and real estate.
The report recommends better targeting of benefits, including a minimum income scheme, to strengthen the safety net. Health care cuts must focus on further reducing inefficiencies while safeguarding cost-effective and critical services.
The complements the Survey by recommending policies to achieve greater competition, widen consumer choice and lower prices. The Competition Assessment scrutinises more than a thousand pieces of legislation in four sectors: food processing, retail, building materials and tourism. If the recommendations are fully implemented, the benefit to the Greek economy in efficiency gains and increased purchasing power for consumers is estimated at 5.2 billion euros a year, or 2.5% of GDP.
The OECD is also working with Greece to reduce administrative red tape. It estimates that by lifting regulatory obstacles in a number of sectors by 25%, businesses could save around 1.8 billion euros annually, while supporting growth in productivity.
For further information, to obtain a copy of the Economic Survey of Greece or the Competition Assessment Review of Greece, journalists are invited to contact the OECD’s Media Division, tel: +33 1 24 45 97 00.