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The next Economic Survey of Greece will be prepared for 2011.
An Economic Survey is published every 1½-2 years for each OECD country. Read more about how Surveys are prepared.
The OECD assessment and recommendations on the main economic challenges faced by Greece are available by clicking on each chapter heading below.
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Chapter 1 Weathering the international crisis
The Greek economy has not escaped the consequences of the global economic crisis, but, it has so far weathered the storm relatively well. It nevertheless remains vulnerable going forward because of its large imbalances both on the fiscal and external accounts. High public debt leaves little room for fiscal manoeuvre to limit the impact of the crisis. The close trade and banking links established with the South Eastern European economies, which are exposed to the financial turbulence, might be a risk in the near future. This chapter looks at how Greece is coping with the crisis, and recommends policies to deal with both the shorter and medium–term macroeconomic challenges.
Chapter 2 Enhancing fiscal viability
Putting public finances on a sound footing is a major policy challenge for Greece. The high public debt, at about 100% of GDP, and repeated fiscal slippages limit the room for counter–cyclical fiscal policy and a large pension burden is bearing on longer term fiscal sustainability. These factors have been reflected in a rise in sovereign interest rate spreads vis–à–vis Germany. Credible fiscal consolidation should focus on both revenue–enhancing and expenditure–containing measures. Tax collection is low in terms of GDP, pointing to considerable scope for raising revenue by fighting tax evasion and eliminating many distortionary tax exemptions. This calls for strengthening tax administration. To deal with frequent spending overruns, expenditure management should be improved through the timely implementation of the ongoing reform of the budgetary process and the rapid introduction of a more modern and transparent public accounting system. Reforms are also needed to rationalize public wage policies to contain the growth of comparatively large personnel outlays. There is also room to improve efficiency in public administration, and to reduce subsidies to public enterprises and other government entities. Additional reforms are also needed in the pension system, which is one of the most generous in Europe, and health care (Chapter 3) to ensure longer term fiscal sustainability.
Chapter 3 Improving the performance of the health care system
Greek health outcomes compare favourably with the OECD average. However, the health care system is seen as not working well by the population. One source of dissatisfaction is the high proportion of private household spending on health, including informal payments, while public health spending relative to GDP is one of the lowest in the OECD. This situation leads to inequities in access to certain medical services. Also, there is a weakening of efficiency of the system, which should be addressed sooner than later in view of a rising demand for medical services, which is going to intensify in the coming decades, and the need to keep government health care spending in check. This calls for reforms in four areas: (i) reviewing the excessively fragmented structure of the health care system and its governance; (ii) enhancing the quality of public primary health care services; (iii) modernising hospital administration; and (iv) further tightening control over pharmaceutical expenditure.
Chapter 4 Raising Education Outcomes
Despite progress over the past decades, Greece’s educational indicators lag behind those of other OECD countries. PISA scores are low, a large number of tertiary students study abroad, and attainment rates are low at all levels of education. Resources devoted to education are also modest. Participation in early childhood education and care is particularly low, influencing education outcomes in later years, the child care sector is poorly regulated and under–developed, and the separate administration of pre–school and childcare has led to inefficiencies. Education quality in primary and secondary levels reflects lack of performance incentives for teachers, deficient curriculum, weak school autonomy and accountability. This has driven children to complementary private courses to prepare for university exams. The university system is rigid and lacks a well performing evaluation mechanism. Recent reforms have addressed some of these issues but more needs to be done. Educational outcomes could be improved by giving more autonomy to schools and universities, and increasing accountability by, for example, performance evaluations of teachers and introducing standard nationwide exams at more levels of school education. A more flexible framework for tertiary education would promote responsiveness to changing demand conditions and enhance the quality of the sector. Educational outcomes could also be improved by more initiatives to counteract the effects of disadvantaged backgrounds on performance. The schools should also ensure that the curriculum prepares students with competences needed to succeed in their post–school life. This includes making vocational and technical education more attractive.
How to obtain this publication
The complete edition of the Economic Survey of Greece is available from:
The Policy Brief (pdf format) can be downloaded in English. It contains the OECD assessment and recommendations.
For further information please contact the Greece Desk at the OECD Economics Department at email@example.com.
The OECD Secretariat's report was prepared by Claude Giorno and Vivian Koutsogeorgopoulou under the supervision of Piritta Sorsa. Research assistance was provided by Joseph Chien.