Greek economy gradually transforming, competitiveness improving, Commission report says

Greece has begun a transformation process, from an economy based in consumption, to an economy focusing more on investments and exports, a report by the European Commission said on Wednesday.

The report on the competitiveness of Greek manufacturing sector and enterprises said that an economic adjustment has sought to adjust the imbalances in the economy. Greece has started the process of transformation, from a consumption-based economy to an investment and exports one, with exports already increased over recent years but investments still disappointing, following the recession and a credit crunch.

The regulatory environment has constrained businesses and entrepreneurship, and these, combined with the lack of competition, have led to lacklustre productivity and competitiveness. However, steps are being taken to tackle many of the structural barriers and regulatory failings. Encouragingly, many efforts are starting to show results, and the ranking of Greece in the World Bank’s "Doing Business" indicators has improved. 

Further significant measures have been taken to ease the creation of companies, and to simplify licensing procedures and investment authorisations. With the technical assistance of the Task Force for Greece, cumbersome export procedures are being simplified.

The difficult economic conditions, continuing uncertainty, and in particular the credit crunch continue to make conducting business difficult, in particular for small and medium-sized enterprises (SMEs). Economic growth is one of the top priorities of the government, and in this context, reforming the public administration remains central in terms of securing the capacity and competence to implement newly adopted legislation and to improve the business environment. Reforming the economy must remain a priority in order for the required changes to take place.

A dynamic corporate sector is crucial to re-starting the economy and achieving growth. By tapping the entrepreneurial potential of citizens and creating the right business environment, Greece can overcome its difficulties and achieve sustainable economic and employment growth, the European Commission said in the report.

The services are the biggest sector in the Greek economy, and tourism is a major part of that in terms of both importance to the economy and employment. Manufacturing contributes close to 10% of the total value added (the EU average is just over 15%). Greece specialises in food processing (manufacture of vegetable oils; processing and preserving of fruit and vegetables). Other important sectors are metals, chemicals, cement and textiles.

There are challenges ahead for the innovation system, as the country needs to transform itself into a stable environment for entrepreneurship and create conditions for growth. According to the Innovation Union Scoreboard 2013, Greece is one of the moderate innovators.

Source: Athens News Agency