Greece: Curbs on tax evasion vital
Real GDP contracted in 2009 as the effects of the global crisis gradually spread to the Greek economy. Economic activity is projected to contract somewhat further in the last quarter of 2009 and early 2010, as domestic demand continues to decelerate in the face of tight credit conditions and weak sentiment. The recent improvement in the external environment should help activity to pick up slowly, and growth could gather momentum in 2011. The unemployment rate is set to reach a double-digit level over the projection period. The current account deficit is likely to remain high.
A credible commitment to reducing fiscal imbalances on a sustainable basis is essential for restoring market confidence, creating room for future budgetary manoeuvre and meeting the rising costs of an ageing population. To achieve this, strict control of spending and curbing widespread tax evasion are vital. Long-term fiscal viability also calls for further pension and health care reforms. Increasing labour and product market flexibility will be important to achieve high rates of growth.
©OECD Observer 2010