Economy fails to keep pace

Despite its high economic growth and high inflows from the European Union, Greece’s economy is falling behind its European partners, both in disposable income and overall competitiveness. Long-term data compiled by the EU’s statistics agency, Eurostat, show that, in its first 20 years of membership, Greece’s per capita domestic product, taking into account purchasing power units, slipped from 69 percent of the EU average in 1981 to 65 percent in 2001. Meanwhile, Portugal’s GDP, which in 1981 was 56 percent of the then-EEC average, has risen to 68 percent despite the fact that Portugal did not join the EEC until 1986. Ireland has seen its per capita GDP, adjusted for purchasing power, rise from 68 percent of the European average in 1981 to 118 percent in 2001. A recent study by the Foundation for Economic and Industrial Research (IOBE), covering the years 1988-2002, shows that Greece’s competitiveness has slipped 14 percent in that period relative to the EU. Higher inflation and relatively high labor costs are to blame.