Greece: Post-crisis Legacies and Post-Programme Challenges€¦ · Greece 2010 Greece Now EU-28 Now...
Transcript of Greece: Post-crisis Legacies and Post-Programme Challenges€¦ · Greece 2010 Greece Now EU-28 Now...
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Greece: Post-crisis Legacies
and Post-Programme Challenges
Akis SkertsosSEV Director General
21/02/2018
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How it compares with pre-crisis Greece
How it compares with today’s Europe
Post-crisis Legacies
Post-Programme Challenges
Greece in numbers
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Weak structure impedes growth
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Greece 2009 Greece Now EU-28 Now
General government primary
balance (% of GDP)-10.1 +2.6 +0.8
General government fiscal
balance (% of GDP)-15.1 -1.2 -1.2
Gross public debt
(% of GDP)126.7 178.2 83.5
Source: AMECO, Ministry of Finance
Substantial fiscal adjustment with
unsustainable high debt levels
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Greece 2009 Greece Now EU-28 Now
Self-employed to population 14.2% 12.4% 7.8%
Employment share
- In very small companies
(<10 employees)
- In large companies
(>250 employees)
56%
13%
57%
13%
30%
33%
Source: ELSTAT, Eurostat
Business size remains inadequate
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Weak institutions hold back
business growth
* Reflects perceptions of the ability of the government to formulate and implement sound policies and regulations
that permit and promote private sector development.
Source: EU Justice Scoreboard 2017, World Bank, World Economic Forum
Greece 2010 Greece Now EU-28 Now
Time needed to resolve
administrative cases through
the justice system (days)
2000 990 <500
World Bank Doing Business
(overall rank)
96
(181 countries)
67
(190 countries)
31
(France)
WEF Global Competitiveness
Institutions sub-index score
(1=worst, 7=best)
3.8 3.7 4.6
World Bank Governance
Indicators: Index of
regulatory quality*
74.6 59.1 83.7
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Heavy reliance on consumption
and limited presence in tradables
Greece 2009 Greece Now EU-28 Now
Private consumption (% of GDP) 68.1 69.9 56.1
Public consumption (% of GDP) 23.3 20.2 20.4
External trade balance
(€ bn)
(% of GDP)
-34.4
-14.5
-18.7
-10.8
+32.0
+0.2
* External trade of Greece vs the rest of the world, including EU.
** External trade of EU-28 vs the rest of the world, excluding EU.
Source: Eurostat
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Post-Crisis Legacies
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Cost of doing business prohibitive
Source: Schneider / IAW Institute, Eurostat, ECB
Greece 2009 Greece Now EU-28 Now
Wage tax wedge
• Average tax wedge on employer cost
(employee with net annual earnings €50,000)
• Average tax wedge on employer cost
(employee with net annual earnings €20,000)
52%
47%
58%
45%
51% (Germany)
41% (Spain)
48% (Germany)
40% (Spain)
Excise taxes
• Fuel (€ per 1000 lt)
• Tobacco (% of retail price)
• Alcohol (€ per hectoliter)
• Communication (mobile telephony, internet etc., rate)
359
73%
1308
25%
700
90%
2450
40%
654 (Germany)
74% (Germany)
1303 (Germany)
19% (Germany)
Indirect taxes / direct taxes (ratio) 1.3 1.7 1.0
Shadow economy (% of GDP) 24 21.513.3
(13 countries)
Number of transactions per capita, per year 8 28 117
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Source: ECB
Greece 2009 Greece Now EU-28 Now
Non-performing loans (NLPs) (%
of total exposures)8.0 46.6 5.2
Interest rates
(%, Up to and including €1 mil.) 4.70 4.69 2.11
Banks’ NPLs limit bank financing
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Inadequate savings and investment –
Investment does not cover capital replacement
Source: Eurostat, AMECO
Greece 2009 Greece Now EU-28 Now
Households’ saving ratio
(gross saving as % of gross
disposable income)
6.6 -9.4 10.3
Gross fixed investment,
private non-residential
(% of GDP)
8.5 7.912.3
(15 countries)
Net investment, total
(% of GDP)4.9 -7.8 3.1
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Unemployment still high though
coming down gradually
Source: ELSTAT, Eurostat
Greece 2009 Greece Now EU-28 Now
Unemployment rate
(% of labour force) 9.6 20.3 7.3
Long term unemployment
(unemployed for 4 years or over as % of
total unemployed)
12.3 32.9 14.7
Youth unemployment
(unemployed aged 15-24 years as % of
labour force of the same age)
25.7 47.3 18.7
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Post-Programme Challenges
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Weak tradables sector limits
transformation of economy
* Exports of Greece vs the rest of the world, including EU.
** Exports of EU-28 vs the rest of the world, including EU.
Source: ELSTAT, Eurostat
Greece 2009 Greece Now EU-28 Now
Employment in Manufacturing /
Employment in Trade (ratio)0.3 0.2 0.6
Non-oil good exports
(% of GDP)6.0* 10.6* 31.1**
Non-oil good imports / exports
(ratio)3.1 1.9 0.9
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Source: Eurostat
Greece 2009 Greece Now EU-28 Now
Unit labour cost
competitiveness
(2009 = 100, fall = improvement)
100 79.4 93.6
Labour productivity
(Real GDP per person employed,
2009 = 100)
100 91.3 107.7
Compensation per employee
(€ thousand)26.6 21.6 35.8
Cost competitiveness improves but
productivity and incomes lag behind
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Poor quality education limits
skills development
Source: OECD
Greece 2009 Greece Now EU-28 Now
PISA score
Science
Reading
Mathematics
470
483
466
455
467
454
(OECD average)
493
493
490
Performance in science, reading and
mathematics
(share of low achievers in all three subjects)
… 20.713
(OECD average)
Lifelong learning
(Participation rate in education and training for
adults aged 18-64 years)
9.8 10.6 16.6
Skills for employment
(proportion of workers who are well matched)65.4 64.3
69.0(22 countries)
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Lagging behind in economic and transformation
prospects leads to brain drain
Source: Eurostat, World Economic Forum
Greece 2009 Greece Now EU-28 Now
Ability to save
(% of households stating that they are
unlikely to save over the next 12 months)
81% 90% 44%
Digital economy and society index
(DESI)
(performance 0 = worst, 1 = best)
0.30 0.38 0.52
Brain drain score
(1 = worst, 7 = best)
(capacity of country to retain talent)
3 2.5 3.7
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Ageing burden puts pressure
on growth and public finances
Source: Eurostat
Greece 2009 Greece Now EU-28 Now
Labour force participation ratio
(Active population as % of population aged
15-64 years)
68.6 69.3 74.6
Dependency ratio
(Population aged 0-14 or over 65 years as %
of population aged 15-64 years)
50.2 55.5 53.2
Pension expenditure
(% of GDP)14.3 17.8 13.0
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No back-tracking in labour market reforms
Reduction of non-wage costs
Introduction of fiscally-neutral investment incentives
Design and implement a strategy for the digital transformation
of the economy
Strengthening of education/labour market interface
Speed-up of justice delivery times
Application of electronic transactions and e-invoicing
to deter tax evasion
Acceleration of bank NPLs cleanup to strengthen balance
sheets and resume financing
Towards sustainable growth
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Thank you!