BUSINESS

Economic freedom diminishes in Greece

DIMITRA MANIFAVA

TAGS: Economy

Greece has dropped 27 places in the latest Economic Freedom of the World report compiled by the Fraser Institute think tank in Canada, falling to 116th among 159 countries, just days after learning it had also sunk on the World Economic Forum’s Global Competitiveness Index.

The findings of the Economic Freedom report, presented on Friday in Athens by the Markos Dragoumis Center for Liberal Studies, were heavily influenced by the imposition of the capital controls in 2015, the center’s officials noted, though many of the Greek economy’s negative features recorded are more deep-rooted.

Economic freedom means fewer regulations and more flexible labor relations, and the countries with the highest readings happen to be those with the best economic conditions.

Greece is rock bottom among the 159 states in the size of the state, garnering just 3.42 points on a scale of 1 to 10, where 10 signals maximum economic freedom. The reason for this is that many enterprises continue to be state-controlled and the ratio of taxes to incomes is particularly high.

This country also ranks very low (121st) in terms of regulatory environment, as it is seen to have too many regulations in the labor market and entrepreneurship that restrict economic freedom. Among the subcategories in this domain, Greece scored particularly low regarding administrative requirements for business activity (i.e. there is too much bureaucracy). Other factors that weighed on Greece’s score are its overregulated labor market and the phenomena of corruption and favoritism.

The latest report, which is based on 2015 data, placed Greece a relatively high 47th in the operation of its legal system and the protection of property rights, with a 5.98 score – the only field where there was an improvement from last year’s report. However, Greece ranks low in the legal execution of contracts and courts’ impartiality.

In terms of currency stability, Greece’s marks dropped from 9.70 to 8.35 due to the imposition of the capital controls in 2015, placing the country in 87th spot. It scored 7.64 points in freedom of international trade.

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