ness expectations, as consumer confidence
improved by almost 20 points and stood at -30.6
from -49.3 in January, while business confidence
deteriorated.
At the same time, the Bank of Greece points out in its
annual report that, due to the fact that the year 2014
was the very first time the recession was halted and
positive growth rates were recorded, in conjunc-
tion with the elimination of huge government and
current account deficits, as well as the implemen-
tation of major structural reforms, it can be argued
that the main conditions are there for the final exit
of the Greek economy from the crisis and the
resumption of fast growth rates in the immediate
future. However, this sanguine prospect is,
according to the report, overshadowed by the
prolongation of uncertainty in regard to the out-
come of the negotiation with Greece’s partners
regarding the financing agreements, which is still
ongoing and its end-result cannot yet be predict-
ed. The conclusion of this negotiation will, after
all, be the number one determinant of the coun-
try’s fate in the forthcoming years. This is why the
Bank of Greece insists that this crucial period
calls for concerted national effort within the Euro
zone, in close collaboration with European and
international institutions, in order to secure that
the Greek citizens’ sacrifices were not in vain, and
to continue reconstructing the economy with the
aim of achieving sustainable growth.
More specifically, according to the annual report
of the Bank of Greece: The recovery of total
employment by 0.3% and of dependent employ-
ment by 2.3% were two major positive develop-
ments. However, the unemployment rate remains
high and is the highest in the EU. In addition, the
long-term unemployment rate continues to rise,
increasing the risk of human capital depreciation.
Unit labour costs decreased further in 2014,
owing to the increase in productivity and the
reduction of employer contributions, thereby help-
ing the economy gain in competitiveness. It is
worth noting that the Greek economy’s structural
competitiveness has been showing signs of
improvement since 2013. More specifically,
Greece moved up to 81st place, from 91st in 2012
in the rankings of the World Economic Forum’s
global competitiveness index, while according to
the World Bank’s “ease of doing business” rank-
ing, Greece climbed to the 61st place, from 65th
and 89th, respectively, in the past two years.
However, “low access to financing, red tape and
tax policy instability remain the biggest drags on
the international competitiveness of Greek busi-
nesses.” According to the Bank of Greece, total
investment remains particularly low, despite the
increase in public investment, reflecting a drop in
private investment mainly as a result of limited
bank lending and high borrowing costs.
This drop in private investment is mainly evident
in residential investment, whereas productive
business investment has started to show signs of
recovery. The feeble increase in investment by
1% in the third quarter of 2014, the first increase
of any kind since 2008, is possibly the signal of a
recovery that may continue in the forthcoming
years.
The year 2014 saw negative inflation, the result of
reduced unit labour costs, low aggregate
demand, the downward effect of indirect taxes on
prices and —especially in the final months of
2014— the decrease in international oil prices. It
is estimated that structural reforms in the labour
Trade with Greece
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