Greece must maintain fiscal discipline and continue to pursue reforms even after the country’s bailout program expires in August, the country’s industrialists union SEV said in its weekly report published on Thursday.
“Contrary to those who think we are at the end of the reform effort, the truth is that we are still at the beginning. The understandable reform fatigue should in no way affect our performance in this field after the completion of the current program,” the union said.
SEV said economic growth from now on will depend on the distribution of investments based on the profitability of the various economic sectors. The better the distribution of resources due to the implementation of reforms, the more prosperity will be achieved, it added.
“Attempts to restore destabilizing policies and practices of the past that have led us to disaster will invalidate the benefits of the reforms and will soon bring the country back into a new crisis,” SEV warned and called for political stability to maintain a good economic climate.
Referring to a recent report by the Organisation for Economic Cooperation and Development (OECD) titled “Going for Growth 2018,” the union said Greece has made great progress in fixing the regulatory environment of product markets and reducing the role of state-owned enterprises in the economy.
On a scale from 0 to 6, where 0 is the number for a fully open economy and 6 is one that is fully restrictive, Greece was rated with 1.7 on the regulatory environment in 2013 from 2.2 in 2008, with an OECD average of 1.5. In terms of state ownership, the country scored 2.8 in 2013, compared to 3.2 in 2008, with an OECD average of 2.7.
As far as the labor market is concerned, SEV’s report notes that, although the average and marginal level of non-wage costs has declined significantly in the country, it still exceeds the corresponding figures in the OECD, creating disincentives for higher employment and wage raises for senior executives.