The recommendations of the Organization for Economic Co-operation and Development (OECD) for Greece may be positive, but with many footnotes as the challenges for the competitiveness of the economy still remain and prevent important investments. In particular, the OECD stands on the effectiveness of the judicial system, recommending changes.
OECD says significant steps have been taken on the reform front, especially in the arrangements to improve the business environment, but challenges remain, especially in terms of the responsiveness of the judicial system. It also recommends the simplification of administrative procedures and the “communication” of the benefit of alternative dispute resolution mechanisms in order to improve the effectiveness of the legal system.
On the business front, OECD reiterates that the Greek economy is dominated by small enterprises (SMEs) with low productivity and limited growth potential, dragging down overall productivity. Price competition remains low in many markets, while regulatory burdens on operating in some key sectors and redeveloping land are preventing new entrants. Non-performing loans weigh on the banking sector’s ability to finance investment. In this area it recommends removing barriers to entry, giving priority to professional services and simplifying land zoning rules.
In the labor market, the Organization finds that workers change jobs less frequently than in most OECD countries, but the green and digital transition will require many workers and businesses to adapt their operations. That is why there are recommendations to increase participation in quality active labor market policies and training, including in all sectors and areas affected by the transition to the green economy.
Digital transition
Public services are digitizing rapidly, but progress in the private sector is slower due to weak investment in equipment, software, training and organization, especially among the many small businesses, the OECD reports.
In this it recommends:
– Gradual reduction of withdrawal of social benefits for those entering the workforce and in-work benefits for the low-paid.
– Promote women’s participation in paid employment by encouraging the provision of more flexible working arrangements.
– Improving incentives to hire new workers with limited experience by reducing employer social security contributions for new hires.
Energy transition
The OECD finds that carbon (GHG) emissions have fallen, but further progress is needed. Greece’s economy is more carbon intensive than most OECD economies. However, large investments are required for the shift to renewable sources and the adaptation of energy use, for the implementation of which Greece’s recovery and resilience plan is taking measures. Improving the energy efficiency of older homes will help to contain energy consumption, reduce emissions and reduce energy poverty.
In this context, the OECD recommends that once prices in the energy market stabilize, Greece should gradually increase prices for emissions not covered by the EU emissions trading system to a floor consistent with achieving zero carbon target. Also put forward a timetable for stricter minimum energy efficiency standards, to be applied to all existing buildings by 2050. Essentially there will be a high standard of support for renovations, using more private finance through interest-subsidized loans that can be repaid through savings energy.
Latest News
Developing the Blue Carbon Economy in Greece
Can Greece make money by protecting its marine environment?
EIB Appoints Greece’s Ioannis Tsakiris as New VP
Ioannis Tsakiris started the new role May 1 after spending 15 years at the European Investment Fund (EIF) and serving as Greece’s Deputy Minister for Development and Investments
Two Greek Beaches in Top 50 in the World
Both Greek beaches were on the list of the best beaches in Europe too
Eurostat: Greece 20th out of 26 European States in Hourly Average Wage
According to figures released by Eurostat, the Benelux Grand Duchy of Luxembourg, one of Europe’s hubs for finance, is in first place
Greek Property Renovation Surge amid Economic Constraints
This has led to a notable escalation in renovation costs, with average prices per square meter exceeding previous norms and reaching even 1,000 euros in premium locations
RRF: Additional €5.1bln Funds for Subsidies to Greece in 2025
By April 22, funds totaling 5.75 billion euros had been transferred for approved projects of the Recovery Fund to entities within and outside the general government and final recipients
OECD: Greek Economy Resilient with 2% Growth Forecast for 2024
However, the OECD highlights challenges including the need to enhance productivity and fiscal adjustment due to high debt levels.
Challenges and Delays in Greece’s Hydrocarbon Exploration
Sources disclose that the petroleum companies holding the concessions are seeking partners to jointly invest and share the costs of exploration and drilling.
Greek Beach Visitors Can Report Violations on New ‘MyCoast’ App
Greek authorities hope the newly-launched, free ‘MyCoast’ app will help clamp down on public beach violations
BoG Figures Confirm Banner Year for Greek Tourism in 2023
20.6 billion euros in related revenues topped the previous year’s figure by 16.5%