The competitiveness challenge

Greece needs to achieve some pretty impressive growth rates if it is to ever counterbalance the enormous cost of the economic crisis.

But this much-needed growth will not come if the government continues to unravel reforms that have already been implemented in the labor market, throws around special handouts and starts giving raises in the public sector, just like the good old days.

The country also has a serious competitiveness deficit that will not be solved unless it drastically reduces bureaucracy, addresses the significant ills of the justice system and stands up to various monopolies and powerful interests.

As long as these key issues remain unaddressed, then the only way to boost competitiveness, unfortunately, will be to lower the cost of labor and make the job market more flexible.