Boosting economic growth and investment to create jobs, improving the stability of public finances and providing an effective social safety net are crucial to help Greece recover from the profound social costs of the economic crisis, the Organization for Economic Cooperation and Development (OECD) said in its latest report.
The survey sees the recovery strengthening in 2017 as ongoing reforms and external demand benefit investment and jobs. It stresses that successful negotiations to address public debt sustainability are critical to improve the outlook.
It underlines that the successful outcome of negotiations between the Greek government with its creditors is of vital importance for an improvement in the prospects of the Greek economy.
Reducing special regimes
Resources will need to be reallocated from savings generated elsewhere, such as from pensions, defence or improvements in tax collection, according to the survey. The pension reform should focus on better aligning contributions and benefits, reducing special regimes and alleviating the burden on the most vulnerable.
More investment, for instance in infrastructure and logistics, would support exports which are essential to a sustained recovery. Liberalising further the network industries would also give the quality and quantity of investments a boost. EU structural funds should be used more effectively to increase investment in education, research, and innovation, as well as in information and communication technology to help improve skills.
According to initial estimates included in the report, the refugee crisis has cost the Greek economy 0.4 per cent of the country’s GDP in 2015.
Very good cooperation
OECD General Secretary Angel Gurria presented the findings of the report to the Greek PM Alexis Tsipras, during his visit in Athens, Thursday. This was the third meeting between the two officials since February 2015.
OECD Secretary-General Angel Gurría said: “Greece has gone through a painful adjustment and it’s still facing a challenging economic and social outlook. Thus the country needs to recover growth to address such challenges. Reforms are starting to bear fruit, it is now essential to improve implementation, increase Greek “ownership” and focus efforts on both social well being and competitiveness. The OECD will continue to stand by the Greek Government, providing expertise and support to help Greece promote more inclusive and sustainable growth.”
“The refugee crisis creates significant problems for the Greek economy and growth,” he added.
Substantial support
“Greece needs to receive substantial support to deal with this new challenge. No single country can address this challenge on its own,” Guria said in comments translated into Greek.
Gurria projected zero growth for the Greek economy this year and a 1.9 to 2 percent GDP increase in 2017.
“It is very important that throughout the year we had a very good cooperation” said Mr. Tsipras to Gurria noting that all those years of the recession it is important recovery to be recorded and to find a way this recovery to embrace all the dimensions and aspects.
“First of all we must leave behind the crisis and secondly to try to take advantage of the new condition, the rise in the economy, the recovery and the growth,” he said.
Tsipras said the economy would return to growth in the third quarter of this year and cautioned that Europe’s migrant crisis could have a fiscal impact.
Sources: Reuters/ANA-MPA
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