Joint study provides ‘an audit of Greece’s economic position’

A study on «Greece’s Economic Performance and Prospects,» jointly undertaken by the Bank of Greece and the Washington, DC-based Brookings Institution, can best be described as «an audit of Greece’s economic position» just after its entry into the eurozone, Ralph C. Bryant, Senior Fellow on Brookings’s Economic Studies program said yesterday. The study, first mooted in 1998, was presented yesterday at the Bank of Greece headquarters. It includes 11 articles covering fiscal and monetary policy, the labor market, social security, banking and the product market. Most of the articles are collaborations between Greek and foreign economists and incorporate comments made by other economists, notably 1980 Nobel Prize winner Lawrence Klein, a pioneer of econometric modeling. A Greek edition is to follow. «I am really looking forward to the Greek edition, because I hope as many Greeks as possible will read it and learn something from our past mistakes,» Bank of Greece Deputy Governor Nicholas Garganas told Kathimerini. The collaboration was, as Bryant put it, a case of «insiders and outsiders working together: the outsiders helping the insiders expand their lateral vision and the insiders helping the outsiders avoid the pitfalls of unfamiliarity.» Bank of Greece Governor Lucas Papademos said the study is being published at «a particularly critical moment for our economy,» when Greece, having managed to join the eurozone, must adapt to the challenges of a very competitive environment. The adaptation will come through additional structural reforms, Garganas said. The cost of creating new jobs must be reduced, privatizations further pursued, taxes must be reduced overall and the system become fairer, and the pension system must be reformed, Garganas said. «It is necessary for certain policies to continue, such as those which aim at improving public finances, especially in order to reduce public debt to an acceptable level,» he added.

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