Friday October 24, 2014 Search
Weather | Athens
19o C
12o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Reforms will see GDP add 5.4 pct by 2018, says Brussels

From the reforms in the products market, which will lead to a reduction in profit margins in the final price of commodities, GDP will gain 3.4 percent within five years and 39.3 percent in the long term.

By Sotiris Nikas

The market reforms Greece is expected to promote will lead to the creation of 190,000 jobs over the next five years and see the country’s gross domestic product grow by 5.4 percent, a European Commission report estimated on Wednesday. The reforms which will help to speed Greece’s recovery are those concerning the products market and improving competitiveness.

The Commission’s study, which focuses on the impact of reforms on Greece, Spain, Italy and Portugal, notes that in Greece’s case the above structural changes will not suffice for the local economy to climb to the level of its top European counterparts.

“In Greece and Portugal the total impact of reforms cannot fully bridge the income gap, illustrating that there are other structural rigidities that have not been calculated,” reads the report. The benchmark set is the average incomes in the European Union’s three wealthiest countries (Luxembourg, Austria and the Netherlands), and with the proposed reforms Greece will close the gap by 78 percent, against Portugal’s 67 percent and Italy’s 87 percent.

The products market is the sector where the Greek government needs to focus its efforts, as the changes that can be implemented will bring additional benefits to the economy and employment levels. From the reforms, which will lead to a reduction in profit margins in the final price of commodities, GDP will gain 3.4 percent within five years and 39.3 percent in the long term (of over 10 years). In terms of employment, there will be a 2.2 percent rise over a five-year period and 11.5 percent in the long term. The Commission admits that in the first couple of years of reform application there will be a marginal decline in GDP and employment, but once the market has adjusted to the new conditions (i.e. after five years) the benefits will be multiple.

From the lifting of barriers to starting a business, the Commission expects GDP to grow 0.8 percent in the next five years, while employment will add 0.1 percent.

On the labor market, Brussels argues that the tax on labor must go down while the tax on consumption should increase. It estimates that this would boost GDP by 1.4 percent over five years and 4.5 percent in the long term, with the respective growth in employment amounting to 2.7 percent and 4.7 percent.

Finally, if subsidies to research and development are increased, GDP will decline in the next five years by 0.4 percent but add 1.4 percent in the long term, while the rise in employment subsidies will see GDP grow by 0.2 percent in five years and lose 0.2 percent in the long run.

ekathimerini.com , Wednesday March 12, 2014 (21:46)  
Tax rate cut in catering sector has paid off
Improvement in VAT collection
Just two banks seen to require more capital
Solidarity levy extended to 2016 in bid to meet targets
Interior Minister accused of not paying his health fund contributions
The health fund for journalists (EDOEAP) said on Thursday that Interior Minister Argyris Dinopoulos, a former reporter, had not paid any contributions between 2009 and 2013 but continued to ...
EU leaders to support Cyprus over EEZ rights
European Union leaders are expected to express “serious concern” on Friday at Turkey’s breach of Cyprus’s exclusive economic zone (EEZ) as it emerged on Thursday that a third Turkish warship...
Inside News
SOCCER
Panathinaikos snatches point at Eindhoven
Panathinaikos offered its fans a glimpse of its glorious past in European competitions snatching a draw at PSV Eindhoven, on an otherwise bad night for Greek soccer in the Europa League, as ...
BASKETBALL
Greens succumb to first loss at Bayern
Panathinaikos’s unbeaten run in all competitions came an end on Thursday as the Greek champion lost 81-75 at Bayern Munich for the Euroleague. Bayern is a team that improves every year, and ...
Inside Sports
COMMENTARY
Tension for tension’s sake?
It is evident that Turkish President Recep Tayyip Erdogan feeds off tension. He would barely have achieved as much as he has – and prevailed – if he had not been so keen to confront a series...
EDITORIAL
Testing ground
The Regional Authority of Attica is a good testing ground for politicians who appear to thrive on accusations to prove whether they can actually solve major problems of a practical nature. T...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Panathinaikos snatches point at Eindhoven
2. Greens succumb to first loss at Bayern
3. Tax rate cut in catering sector has paid off
4. Improvement in VAT collection
5. Just two banks seen to require more capital
6. Solidarity levy extended to 2016 in bid to meet targets
more news
Today
This Week
1. Strong winds hamper sea travel
2. TBEX brings together 800 travel bloggers in Athens
3. Samaras to represent Anastasiades at European Council meeting
4. Spanish unemployment lowest since 2011 as economy grows
5. Cyprus president to sit out EU summit due to high blood pressure
6. Arrivals show increase in January-June 2014 period
Today
This Week
1. The past, present and future of the Greek debt crisis
2. Coalition shooting itself in the foot
3. Greece’s closed society is central to its current malaise
4. Greece must stick to reforms, says Schaeuble
5. At least 11 banks to fail European stress tests, three in Greece, report says
6. Cyprus to block Turkey's EU talks after EEZ violation
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.