Monday

25th Oct 2021

Greece to stay in recession, warns OECD

  • Still in recession. The OECD expects Greece's economy to shrink in 2014 (Photo: YoungJ523)

The Greek economy will stay in recession in 2014 for the seventh consecutive year, according to the OECD.

The Paris-based Organisation of Economic Co-operation and Development (OECD) think-tank forecasts a further 0.4 percent economic slowdown next year in its economic survey of Greece published Wednesday (27 November), lower than the 0.6 percent growth currently projected by the Greek government and its creditors.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

It also says that Greece will struggle to bring its debt burden below a massive 160 percent of GDP by the end of the decade, nearly 40 percent higher than the 124 percent expected by the European Commission.

The OECD states that a sharp fall in prices could also force Greece to seek more time and money from its creditors. Greece is currently three years into a €240 billion emergency loan programme.

"If negative inflation risks materialise, assistance from Greece's euro area partners may need to be considered," the OECD said.

Speaking in Athens on Wednesday, OECD Secretary-General Angel Gurría said that it was "imperative that both the costs and the benefits of adjustment are shared fairly” if the country's reform programme was to work.

However, Gurria was full of praise for Athens' progress in reforming its economy and particularly a “spectacular reversal in the balance of payments”.

Greece has lost more than 25 percent of its economic output since 2007 and seen its unemployment rate climb to 27 percent, the highest in the EU. Its debt pile is expected to peak at around 180 percent this year, nearly double the average across the rest of the eurozone.

The OECD report calls on the Greek government to scrap 555 regulations hindering businesses ranging from retailers to building materials sector and tourism, arguing that slashing red-tape would lead to an extra €5.2 billion in economic activity.

"A more rapid return of confidence and foreign capital, attracted by low asset prices, and privatisation, could support domestic demand through both investment and consumption," it argued.

For his part, Kostis Hatzidakis, Greece's minister for competitiveness agreed that the government would continue its programme of market liberalisation. "It is true that our economy has been plagued by bureaucracy, protectionism and market distortions for a long time," he said.

Italian leader criticises Greek bailout terms

Greece's international lenders approved the latest tranche of its bailout money Monday amid criticism that the reform programme Athens is expected to do in return has "worsened the crisis."

Erdoğan orders out US and EU ambassadors

Turkish president Recep Tayyip Erdoğan has ordered out the ambassadors of his top Nato allies and Western investors, in what his opponents called a reckless political stunt.

News in Brief

  1. Timmermans cancels Moscow visit ahead of COP26
  2. Report: EU to open new mission in Kabul
  3. Bulgaria and Romania run out of beds for Covid-patients
  4. Afghanistan 'on brink of collapse', Sweden warns
  5. Far-right vigilantes stopped on Polish-German border
  6. Croatian right-wingers seek euro referendum
  7. Orbán accuses EU and US of election meddling
  8. Militants free international observers in Russia-occupied Ukraine

Agenda

Energy and gender in EU focus This WEEK

In the European Parliament, the home affairs committee will start to work on new migration laws: providing the legal framework for the new migration policy in the EU.

Opinion

Lessons for the EU in Sahel, from Afghanistan

Former UK ambassador to Mali and Niger, who also served in Kabul, reflects on the implications of the Taliban's victory in Afghanistan for EU policy in the Sahel.

Stakeholders' Highlights

  1. Nordic Council of MinistersNew report reveals bad environmental habits
  2. Nordic Council of MinistersImproving the integration of young refugees
  3. Nordic Council of MinistersNATO Secretary General guest at the Session of the Nordic Council
  4. Nordic Council of MinistersCan you love whoever you want in care homes?
  5. Nordic Council of MinistersNineteen demands by Nordic young people to save biodiversity
  6. Nordic Council of MinistersSustainable public procurement is an effective way to achieve global goals

Latest News

  1. Erdoğan orders out US and EU ambassadors
  2. EU banks play 'major role' in deforestation, report finds
  3. NGOs reveal 71 'revolving-door' cases at fossil-fuel giants
  4. Energy and gender in EU focus This WEEK
  5. Nato invite sees Nordic states stepping up security cooperation
  6. Lessons for the EU in Sahel, from Afghanistan
  7. EU states want more Belarus sanctions
  8. Gas price spike exposes rift at EU summit

Join EUobserver

Support quality EU news

Join us