The need for coherent policies that will support substantial convergence with Europe and the importance of targeted policies to enhance competitiveness, with reforms in justice, education, investment attraction, trade facilitation and the promotion of extroversion, are highlighted in the Annual Report of the National Productivity Council of Greece for 2024.
The report was presented at a special event on Wednesday, December 11, at the Centre for Planning and Economic Research (KEPE) by Theodoros Tsekeris, Researcher A' of CEPE and Head of the Coordinating Committee of the National Productivity Council.
This was followed by a discussion on the role of institutions and reforms in economic growth.
Participants in the discussion were Nikos Christodoulakis, Professor Emeritus of the Athens University of Economics and Business and former minister; Antonios Karampatzos, Professor of the Law School of the National and Kapodistrian University of Athens; and George Economidis, Professor of the Athens University of Economics and Business. The moderator was Panagiotis Liargovas, President and Scientific Director of the KEPE and the National Productivity Council.
According to a statement from the KEPE, Mr. Tsekeris stressed the importance of productivity for economic growth, especially in a multi-crisis environment following the COVID-19 pandemic. He underlined that, despite the small increase in labour productivity in Greece, the gap with the Eurozone remains significant. He noted that multi-factor productivity (TFP) recorded a 2% increase from 2022-2024, while labour productivity improved by 1% in 2023, outperforming the EU27 and the Eurozone. He also referred to the challenges facing Greek businesses, such as high energy costs and the need to boost investment in technological upgrading and innovation. He stressed the importance of targeted policies to enhance competitiveness, including reforms in justice, education, attracting investment, facilitating trade and promoting extroversion. In conclusion, he underlined the need for coherent policies to support effective convergence with Europe, strengthening SMEs and the competitiveness of the Greek economy.
Nikos Christodoulakis, in his analysis, referred to the convergence policies of the European Union, pointing out the divergence dynamics observed among the Eurozone countries, with particular emphasis on the case of Greece. He underlined that our country tends to converge mainly with the countries of Eastern Europe. He also referred to the significant fall in multifactor productivity, noting that it does not seem to be affected by the change in labour productivity, indicating the decisive influence of other institutional factors on economic growth. Moreover, he pointed to the institutional weaknesses in Greece, focusing on divergences in accountability, government effectiveness, the fight against corruption, the rule of law, and the quality of the regulatory environment, concluding that institutional breakdown, particularly during the crisis, is a key obstacle to the performance of the Greek economy.
In his presentation, Mr. Economides analysed the state of the Greek economy, highlighting the low labour productivity, despite economic growth, and the limited convergence with Europe. He noted that the increase in the employment rate and multifactor productivity had not had the expected positive impact on growth. He stressed the importance of gross fixed capital formation, which is projected to be the main driver of growth, and underlined the positive performance largely due to the Recovery Fund's capital. At the same time, he expressed concerns about low savings, current account deficits and dependence on external financing, which make the country vulnerable. He also referred to the importance of the mix and not only the size of public debt, as well as the challenges of achieving primary surpluses. Finally, he stressed the need for macroeconomic stability, effective regulation of markets, quality education and improved institutions and highlighted obstacles such as inefficiencies in public spending, tax evasion and negative demographic trends.
For his part, Antonios Karampatzos analysed the role of institutions in fair and sustainable economic growth, noting that institutional inefficiency undermines investment attraction. He underlined the pathologies of the rule of law, with justice being the "big patient" of the country and stressed that justice cannot be achieved without strong institutions. He dwelt on the difference between subjective perceptions of corruption and actual corruption indicators, stressing the importance of qualitative data to accurately capture institutional functioning. He explained that delays in the administration of justice are due to the inefficient distribution of judges in the territory and not to understaffing, and he mentioned the weak ratio of judicial officers to judges in Greece compared to the EU.
Finally, he noted the distortions from Greece's overly complex civil procedure system and low international rankings, which increase investment risk.
