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Roadmap for Growth

GreekFlagThe coalition government of Samaras and Venizelos lost the elections because the purchasing power of consumers has declined substantially due to lower wages, higher taxes and less employment. But we cannot attribute this entirely to austerity. Prices in Greece have historically exhibited downward rigidity. One important reason for this is regulatory barriers to enhancing competition. OECD has been working with Greece, and Syriza requested their guidance as well. Read Greece: Structural reforms under way but more progress needed in boosting market dynamism and OECD Competition Assessment Reviews: Greece.

In addition to necessary and long overdue structural overhauls, Greece needs a smaller and more efficient government, effective tax collection through an independent IRS-type tax agency, and substantial anti-corruption measures. Greece also needs to become much less bureaucratic and cut red tape, invest in education and R&D, embrace entrepreneurship and orient itself into becoming an exporting economy. Greece can set up research parks focusing on technological innovation, similar to US research parks, and provide incentives to major corporations to invest in Greece. Privatizations need to continue. The mentality of a large monolithic governmental employer needs to be gone. Forever!

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