SETE Positions

Stabilizing the economy

The prerequisites for the Greek economy to enter a steady growth path

Following the completion of the thirdeconomic adjustment programme, Greece has a window of opportunity to exploit the structural adjustments that have been applied to its economy, to remain on the reform path and to implement its own growth plan through a sustainable model which will create the necessary and sustainable primary surpluses and ultimately reduce the debt as a percentage of GDP.

According to an INSETE study, significant structural changes have been observed over the last eight years in competitiveness, fiscal adjustment and the external balance. Based on the course of the economy over the first quarter, real GDP growth in 2018 may approach, subject to certain conditions, a 2.5% rate on an annual basis, with a considerable positive contribution coming from net exports.

As demonstrated throughout the entire duration of the crisis, tourism is one of the central pillars of support for the national economy. It is indicative that direct income from inbound tourism over the last eight years reached the impressive figure of EUR 100 billion. These revenues could have been even higher if the tourism sector had adopted a rationale of boosting competitiveness, with a more strategic targeting.  

Over the last eight years a lot has been accomplished under difficult circumstances, but even more could have been achieved if there had been a structured and holistic national plan. This would have automatically translated into thousands of new jobs, more taxes and contributions for the state, higher liquidity in the market and stronger support of local communities.

It is therefore necessary to have a coherent national plan for boosting the competitiveness of the country, which requires the inclusion of tourism as a central priority in the growth model of the next decade with specific policies for its reinforcement.

In this respect, the measures that should be taken must include the reduction of tax rates and the creation of a stable fiscal framework, the adoption of measures to fight bureaucracy that acts as a strong deterrent to foreign businesses and the operation of a flexible financial system.

Moreover, procedures for the development of a national spatial planning framework and a clear framework for land use should be expedited, policies to support investments and the attraction of capital should be defined, and tourism entrepreneurship should be supported with specific incentives.

The planning of actions should be supplemented by safeguarding the principle of legal certainty, the introduction of measures to protect the environment, ensuring a sustainable tourism development, and the cultivation of a new strong tourism awareness.  

An essential prerequisite for growth is the stability of the country, while having a central unit responsible for the coordination of the synergies and the cooperation among all parties involved will also play a key role in the effort.

The economy demonstrates that it can remain on a steady improvement course. From now on, Greek governments should focus on the preservation of credibility, stability and international competitiveness, which are the growth advantages that Greece recovered in the 2010-2017 period.

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