ECONOMY

Commission sees sharp decline in growth after 2004

The European Commission’s spring economic outlook report due to be released tomorrow is expected to be a mortifying one for Greece as it predicts a dramatic fall in the country’s growth rate after 2004. In the chapter on Greece, it notes that «after 2004, it will be particularly improbable for economic activity to increase or be sustained at the current level» while inflationary pressures will be «stronger» and public debt will not have been substantially reduced. Moreover, the slow pace of reforms in the labor market will lead to low employment and high unemployment. A mix of serious dysfunctions in the product market, the small amount of investment set aside for improving the quality of human resources and for research and the development of new technology will not allow productivity to increase «in a way which will speed up convergence.» The Commission will make a series of recommendations on how to deal with this. It will note that Greek growth for years has been fueled by two external factors, the 2004 Olympic Games and EU funds, which will soon come to an end, thereby uncovering Greece’s structural weaknesses.