According to the latest OECD report, the Greek bailout program could save the Greek economy, fuel growth, increase jobs and improve the population's living standards. But success will depend on the full implementation of the reforms.
The secretary general of the Angel Gurria institute, presenting the report in Athens today, appreciated the difficult decisions already taken so far by the Greek authorities. “The reforms carried out in the last year have been remarkable. These achievements don't always seem to be appreciated in the right way in Greece or abroad.”
The government faces a double challenge: to prove to the financial markets its determination to reduce fresh debt and to convince Greeks that the suffering they are experiencing today is a necessary step to build a stronger economy in the future.
The report underlines how it is necessary to continue cutting the deficit to reverse the trend of growth in public debt. Focusing on privatizations and improving the management of public institutions are also two important ways forward. They will potentially stimulate growth through greater efficiency and by attracting foreign investment.
The OECD shows that growth can also come from exports and investments, if supported by fundamental reforms to improve the weakness of the public sector, through privatizations and the new package of European Union funds. Combined, all these reforms could reduce public debt to less than 60% of GDP over the next 20 years, from 140% in 2010.
However, in 2011 Greece will record a recession with a 3,5% drop in GDP at the end of the year (still better than the -4,4% of last year). A slight recovery is expected only in 2012, with an increase of 0% of the GDP thanks to the increase in investments and exports.
