Improving competitiveness is the biggest challenge facing the Greek economy, according to the governor of the Bank of Greece, Yannis Stournaras, who asked the systemic political parties to “show consensus.”
Speaking during the presentation of his award from Capital Link in New York, Stournaras said that Greece, despite being a success story, lags behind in terms of structural competitiveness compared to most European countries, despite the significant improvements in recent years. For example, according to the global competitiveness index of the Swiss institute IMD for 2024, Ireland ranks 4th, Portugal is 36th and Greece ranks 47th. A similar picture emerges if one examines data from the World Bank, which constructs six indicators of overall governance for more than 200 countries for the period 1996-2022. Greece lags behind Portugal and Ireland over the entire period and in every single indicator.
This significant lag is responsible for the country’s large current account deficit, which corresponds to 6.2% of GDP in 2023, the central banker added.
In order to reverse this image, Stournaras said, it is necessary to implement a wide range of ambitious reforms aimed at improving structural competitiveness. These reforms should aim to eliminate structural weaknesses, such as delays in the administration of justice, red tape in public administration and the digital skills deficit. At the same time, however, it is necessary to eliminate the remaining restrictive practices that prevent the competitive functioning of the markets, by removing barriers to entry and opening the markets for goods and services to competition.
In order for the necessary reforms to proceed, according to the governor of the Bank of Greece, wider political consultations are required. On the contrary, the obsession with ideological approaches poses obstacles to the implementation of proven solutions in areas such as tax evasion, the fight against lawlessness and impunity, the gaps as regards education compared with the rest of Europe and the delay in the delivery of justice.
He made special reference to Greek-Turkish relations and noted the high defence spending that disproportionately burdens Greek taxpayers as a result.
