Greece is making progress. After a prolonged depression, the economy stabilized in 2016 and is expected to grow by 1.6 percent in 2017 and close to 2.5 percent in 2018. According to OECD projections, unemployment is gradually decreasing, reaching a five-year low of close to 21.2 percent in June 2017 (National Bank of Greece Labor Force Survey Q2 2017), supporting private consumption. Exports are recovering, while tourism flows have had another record season.
The effect, however, is still not strong enough to be felt across large parts of the population, where poverty, unemployment and underemployment are still weighing on people’s opportunities and hopes. As the OECD warned in its 2016 Economic Review of Greece, fiscal consolidation measures and structural reforms tend to be less effective or might even have a short-term recessionary impact when implemented in an extremely weak aggregate demand context, as happened in Greece.
Macro stability and fiscal discipline are essential, but at the same time it is crucial to keep building the structural conditions and frameworks to stimulate economic activity, decent job creation, innovation and human progress.
This has been the guiding principle of the renewed collaboration between the Organization for Economic Cooperation and Development and the government of Greece. While several international organizations have focused on helping Greece adjust its public finances to ensure that the government keeps paying its debt, other multilateral institutions are working with the Greek government to build the foundations for more resilient, more inclusive and more sustainable growth. The OECD is one such organization. And we are making good progress.
Since the beginning of Prime Minister Alexis Tsipras’s administration, the OECD has established a close partnership with the Greek government to work together to fix some of the key structural problems of the Greek economy. The idea was to treat the causes of the economic failures or malfunctions, but with a particular focus on inclusive growth and human well-being as the ultimate goal. Based on a new joint document of cooperation signed by Secretary-General Angel Gurria and Prime Minister Tsipras at the OECD in March 2015, and led by a newly created OECD-Greece Joint Steering Committee – headed on the OECD side by the Chief of Staff and G20 Sherpa Gabriela Ramos and on the Greek side by Finance Minister Euclid Tsakalotos – the OECD started working closely with the Greek government, providing analysis and policy recommendations, but also comments and advice on draft legislation and regulations, on a wide range of crucial areas.
Since then, we have been supporting Greece on improving public administration; regulatory frameworks; banking services; state-owned enterprises; public procurement procedures; financial stability; and competition in the key sectors of wholesale trade, construction, e-commerce, media and manufacturing.
The OECD-Greece partnership strengthened with time, based on a deep-rooted trust and a basic principle for any international cooperation: that the OECD does not come to Greece to impose views or policies, but to understand the Greek complexities and recommend tailor-made policy options based on international best practices. This has allowed us to build a fruitful relationship, in collaboration with an active Permanent Delegation of Greece at the OECD, based on mutual respect and a shared will to deliver results for the benefit of the people.
Powered by this energy, we are now working with the Greek government on three projects in crucial areas that will help Greece to strengthen its inclusive growth capacity in the medium and long term:
Fighting corruption. The OECD is working with the Greek General Secretariat Against Corruption (GSAC) – with the support of the European Commission’s Structural Reform Support Service (SRSS) – on a project that provides technical assistance to Greece in the design and implementation of its Anti-Corruption Plan. Fighting corruption is one of the central challenges in Greece. In spite of recent progress, Greece’s performance in Transparency International’s Corruption Perceptions Index worsened in 2016, when the country fell to 69th place out of 176 countries, compared to 58th out of 167 countries the year before. To help Greece take the necessary steps to tackle this challenge, the OECD project focuses on boosting integrity and tackling corruption in the public and private sectors, providing policy recommendations and training through workshops, seminars and high-level discussions on issues such as whistle-blower protection, public integrity, and the collaboration between business and civil society in the fight against corruption.
Improving education. The OECD is working with the Greek Education Ministry – also with the support of the EC SRSS – in a major review of the Greek education system. The results of Greek 15-year-old pupils in the OECD Program for International Student Assessment (PISA) are close to the OECD average; however, it is lagging behind many countries, and it has not shown improvement in recent years. In addition, the basic skills of adults in Greece are lower than the OECD average. These challenges come at a time when Greek education expenditure has, unsurprisingly, declined. In this context, we are assessing how to improve the education system and strengthen school results, helping the Greek government to identify best procedures for budgeting expenditures for education; design effective policies to increase the autonomy of schools, universities and other postsecondary institutions; and provide training and development for effective school leadership. The final recommendations will help build a more efficient, inclusive and competitive education system.
Improving public administration and public services. We are also starting to work with the Ministry of Administrative Reconstruction on a project to help accelerate and optimize the digital transformation of the Greek public sector. Our 2017 Digital Economy Outlook places Greece close to the OECD average for open government data availability and accessibility. The forthcoming project however will be focusing particularly on helping citizens, by strengthening the capacity of Citizens’ Service Centers (KEPs); improving the capacity building of Greek civil servants through better leadership and digital skills; and promoting an inclusive public administration, strengthening women’s participation in positions of responsibility.
Apart from these targeted projects, we are currently working on the 2018 Economic Survey of Greece, which we produce every two years in close coordination with the Greek Ministry of Finance and the Bank of Greece. This report will focus on improving the macroeconomic environment for inclusive and sustainable growth, focusing particularly on enhancing investment, boosting employment and reducing poverty.
Looking ahead, we aim to propose new collaborations to help Greece improve its investment framework, design inclusive and sustainable tourism policies, develop a strategy on export diversification and strengthen the territorial development plans for some of the key Greek islands, proposing to work with local authorities in the context of an international network of island governments for the exchange of best practices and the promotion of strategic partnerships.
For Greece to recover its strength and achieve more resilient, inclusive and sustainable growth, it is important to enhance the government’s investment capacity, while at the same time creating the necessary conditions for private investment, entrepreneurship, innovation and exports to flourish. If the first axis compromises the government’s fiscal consolidation commitments with its creditors, the second track can be developed through smart structural reforms and evidence-based policies. These reforms and policies should be designed by the Greek government and Parliament, with the support of international organizations.
The OECD is delighted to help Greece design, develop and deliver these structural changes, providing policy analysis and international best practices. We are also ready to help with the implementation process, which is essential to transform reforms into concrete gains for the population. And we are ready to do so in close collaboration with the Greek government as well as local authorities, keeping in mind three essential elements for any international cooperation with Greece: the distinctive historic and cultural factors that influence the Greek economy’s dynamics; the difficulties in formulating and implementing economic and social policies while complying with the conditionality of a memorandum of understanding with creditors; and the tremendous social pain that this crisis has inflicted on the Greek people. The OECD will keep working to help Greece face these and other challenges to keep improving the opportunities and well-being of its people through better policies for better lives.
* Mario Lopez-Roldan is head of the Intelligence Outreach & Speech Writing Unit and secretary of the OECD-Greece Joint Steering Committee, Office of the OECD Secretary-General. Kostas Panagiotopoulos is co-ordinator of the Outreach and Research, Speech Writing & Intelligence Outreach Unit, Office of the Secretary-General.