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Economic Policy Reforms 2023
Going for Growth
Report
Economic Policy Reforms
Table of contents
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Greece
Product and labour markets functioning
Performance gaps
Ongoing reforms are working to improve the business environment, but challenges remain, especially in the responsiveness of the justice system.
Greece’s economy is dominated by small firms with low productivity and limited growth potential, dragging overall productivity. Price competition remains low in many markets, while regulatory burdens to operate in some key sectors and to re-develop land impede new entrants. Non-performing loans, weigh on the banking sector’s capacity to fund investment.
Workers change jobs less often than in most OECD countries, yet the green and digital transitions will require many workers and firms to adapt their activities.
Recommendations
Improve the legal system’s effectiveness by simplifying administrative processes and communicating benefits of alternative dispute resolution mechanisms.
Lower entry barriers, prioritising professional services, and simplify land zoning rules.
Increase participation in quality active labour market policies and training, including across all sectors and regions affected by the green economy transition.
Digital transition
Performance gaps
Public services are digitalising rapidly but progress in the private sector is slower due to weak investment in equipment, software, training and organisation, especially among the many small firms.
Recommendations
Taper the withdrawal of social benefits more gradually for those entering work and introduce in-work benefits for low-wage workers.
Promote women’s participation in paid employment by encouraging the provision of more flexible work arrangements.
Improve incentives to hire young workers with limited experience, by waving employers’ social security contributions for new hires.
Inclusiveness, social protection, and ageing
Performance gaps
Poverty, especially among the young and those out of work, is high.
Inequality is mostly reduced through pensions. Transfers reduce poverty by less and do not address barriers to enter work.
Family policy reforms are improving the support to caregivers but still lag behind many OECD countries. Employment rates, particularly for women and the young, remain low.
Recommendations
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Climate transition
Performance gaps
GHG emissions have declined but further progress is required. Greece’s economy is more carbon intensive than most OECD economies. Large investments are needed to shift to renewable sources and adapt energy use, which the Greece 2.0 Recovery and Resilience plan takes steps to implement.
Carbon prices are high on average but fragmented across fuel uses.
Improving the energy efficiency of older housing will help contain energy consumption, cut emissions and reduce energy poverty.
Recommendations
Once energy market prices stabilise, gradually raise prices for emissions not covered by the EU emission trading scheme to a floor that is consistent with reaching net zero.
Mandate a timeline of tightening minimum energy efficiency standards, to be applied to all existing buildings by 2050.
Substantially upscale support for renovations, by using greater private financing through interest-subsidised loans that can be repaid via energy savings.