Foundations for Growth and Competitiveness 2026

Greece

Greece’s economy held up well during recent crises and outpaced the euro area over recent years. Gaps in GDP per capita to the most advanced OECD economies started to narrow as capital deepening, job creation, and structural reforms supported a steady recovery from the prolonged crisis. Progress has, however, been limited by weak productivity gains as the investment gap, albeit narrowing, remains large and many, mostly smaller firms still struggle to adopt digital technologies and innovate.

Achieving higher incomes, safeguarding competitiveness, and meeting high spending needs while maintaining public debt on a declining path will require bolstering productivity and sustaining employment gains. Better access to finance would empower more SMEs to innovate and invest in advanced technologies. Improving training and increasing labour force participation of women would ease skill shortages. Removing remaining regulatory burdens would strengthen competition and business dynamism.

Economic performance

Gaps to the average of the upper half of the OECD countries

Source: Panel A: OECD, Economic Outlook database; Panel B: OECD, Labour Force Statistics database; Panel C: OECD, Economic Outlook and Productivity databases; Panel D: OECD, Economic Outlook and Annual National accounts, GFCF by assets databases.

Selected policy gaps

Source: OECD calculations based on the Foundations for Growth and Competitiveness database.

Finance: Continue to reduce and restructure non-performing loans

Banking is the main source of external financing. While banking sector health has greatly improved, the decade-long economic crisis left scars on the financial system. The share of non-performing loans (NPLs) on bank balance-sheets remains comparatively high, despite having decreased significantly, helped by “Hercules” schemes. Credit servicers, to whom risks have migrated, face obstacles in working out NPLs from cumbersome collateral liquidations and delays in court procedures, while debtors of unresolved NPLs remain effectively non-bankable. A 2024 reform of the judicial system aims to accelerate insolvency cases.

Recommendations

✓ Reduce the length of court procedures, building on the recent bankruptcy law and the 2024 reform of the judicial system.

✓ Continue progress with completing and digitalising the cadastre and land registry to ease procedures for e-auctions of foreclosed properties.

✓ Carefully monitor the evolution of non-performing loans and distressed debt.

Digital diffusion: Improve access to digital technologies and digital and management training for SMEs

Persistent productivity gaps are accompanied by slow diffusion of digital technologies. Use of digital technologies, from having a business website to using cloud computing and AI, is lagging other OECD countries, especially among smaller firms. Swiftly improving but still limited roll-out of high-speed broadband infrastructure, lack of managerial capacities and limited access to innovative finance are the main obstacles to reaping the benefits of digitalisation.

Recommendations

✓ Expand and subsidise access to quality management training for small and medium-sized business management, including to digitalise their business operations.

✓ Roll out financial literacy programmes for owners of micro and small businesses.

✓ Swiftly implement plans to expand coverage for very high-capacity networks (gigabit and 5G) to all households by 2030, including by ensuring sufficient funding and monitoring progress.

Skills: Strengthen access to high-quality training

Skill shortages are high and rising, hindering firm growth as well as innovation. While unemployment has been falling, it remains high compared to other OECD countries. Unemployment and skill shortages co-exist as skill mismatch is high. Adult skills as measured by PIAAC are lagging other OECD countries and uptake of training is low. Targeted training for unemployed workers through the Public Employment Service (DYPA) has improved but scarce funding for Active Labour Market Policies (ALMPs) holds back further progress.

Recommendations

✓ Ensure the quality of training providers through regular quality assessments and improved certifications of adult learning courses.

✓ Expand targeted training vouchers to enable adults to undertake longer training programmes and provide statutory education and training leave.

✓ Rebalance the high share of support for direct job creation towards more training and counselling for unemployed workers.

Female employment: Raise funding for quality daycare

The gap in employment rates between men and women remains large and the female labour force participation rate, while improving, remains among the lowest in the OECD. Enabling a better balance between work and family life would facilitate the labour market access for women, thereby increasing skill supply. Daycare capacities are however low as spending is geared towards birth grants rather than in-kind support.

Recommendations

✓ Improve access to affordable quality childcare by shifting public spending from birth grants towards childcare facilities.

✓ Further strengthen gender stereotype awareness campaigns and equality labels for businesses.

✓ Introduce incentives to ensure the new paid paternal leave is taken up, such as longer combined leave duration or higher benefits if fathers take parental leave.

Competition: Ensure regulatory quality and easing restrictions for services

Weak business dynamism is accompanied by high perceived regulatory burdens. Firm entry and exit rates are low as the economy is dominated by small firms with often low productivity and failing to grow. While the regulatory framework has overall become more competition-friendly, there remains room for improvement, notably for regulatory quality and professional services that provide important intermediate services for businesses.

Recommendations

✓ Ensure the effective and timely consultation of stakeholders on new draft legislation and regulations, including by avoiding emergency legislations.

✓ Formalise and accelerate the review of existing business regulations in cooperation with businesses and union representatives.

✓ Ease regulatory restrictions in professional services such as lawyers and notaries, including with respect to market entry, pricing of legal services and professional cooperation between lawyers and notaries.

Recent progress on structural reforms

Greece has undergone many structural reforms in recent years. Major reforms include a new insolvency regime aims to facilitate the enforcement of property rights. The reform of the judicial system aims to improve efficiency through balancing the distribution of cases and digitalising procedures. Measures incentivising and improving information on electronic payments combat tax evasion. Digitalisation and simplification of many public services are progressing well to improve public sector efficiency, while codification and several measures improving legislative quality aim to reduce regulatory burdens.