Greece’s competitiveness: A survey and concluding remarks

Abstract

This chapter identifies the specialisation pattern of the Greek economy in the years prior to the crisis and analyses the various conceptual dimensions of competitiveness. Although Greece has experienced an increase in Unit Labour Costs (ULC), this could not be regarded as the key factor behind the accumulated current account imbalances. Greece has been gradually de-industrialising since 1980s and this process accelerated in the years after country’s accession to the common currency. The post-euro era was essentially a period of massive capital inflows, which transformed Greece into a highly introvert economy. Improving competitiveness in Greece requires a different production and export paradigm, which is not embedded into the recipe of internal devaluation imposed to Greece in exchange of external bailout programmes. In an increasingly globalised environment being competitive is a far more complex process than simply reducing the cost of labour as manifested in the Competitiveness Pact (2011). It is now in Greece’s political and economic elite to design and implement an economic regeneration plan, an extremely challenging task given the chronic inadequacy of the political system.