Trade with Greece
56
long-term growth capacity of the Greek economy,
through the faster improvement of labour produc-
tivity and the increase of employment.
The reforms that have been realised to date have
contributed to an incipient restructuring of the econ-
omy towards a new, extrovert growth model, based
on internationally tradable goods and services sec-
tors, and the increase of exports as a percentage of
Greece’s GDP. The evidence is well-grounded and
allows us to estimate that the pace of recovery will
be stepped up, provided that the remaining reforms
will also be implemented.
Moreover, the BoG Report highlights certain chal-
lenges to ensuring the Greek economy’s recovery.
Despite the substantial progress of the past few
years and the recovery of the country’s interna-
tional labour cost competitiveness, no such
progress has been recorded in regard to price
competitiveness. Moreover, despite the improve-
ment of cost competitiveness up to now, the
exports of goods are below the level anticipated
on the basis of historical data. This can, to a great
extent, be attributed to the lack of adequate
financing, the higher cost of long-term borrowing,
increased uncertainty, and the fact that reform in
the goods and services markets, as well as the
elimination of various obstacles to investment,
have been slower than reforms in the labour mar-
ket.
Picking up the pace of reform is expected to
enhance the economy’s recovery and restructur-
ing towards internationally tradable goods and
services, and boost exports.
It is worth noting that several legislative and regu-
latory measures have been taken in regard to the
authorisation and supervision of credit servicing
and credit acquiring firms; the modernisation of
bankruptcy law; the protection of vulnerable bor-
rowers, along with measures against the so-called
“strategic defaulters”; the shift of banks to long-
term workout solutions and the requirement that
banks meet specific operational targets in terms
of non-performing loan management.
The recovery of the Greek market will also be
assisted by the gradual easing and eventual full
lifting of capital controls, which will improve confi-
dence and liquidity, facilitating the business trans-
actions of both enterprises and individuals.
Moreover, the Economic Sentiment Indicator that
is published by the Foundation for Economic and
Industrial Research (IOBE), remained unchanged
in January 2017 at 95.1 points. This is still the
