Structural problems of the Greek economy and policy recommendations

The goal of the current article is to explore structural problems of the Greek economy and make policy recommendations. Greece is currently faced with large macroeconomic problems as a shrinking GDP, budget deficits, large accumulated national debt, high employment, poverty and a business sector faced with closures and job losses. Many foreign and domestic economists and politicians claim that these problems were created mainly due to low government revenues and high government expenses. Based on this belief, they propose and apply a set of policies that aim specifically at these two factors: decreasing government expenses e.g. through reducing civil servants and minimising health costs, and increasing government revenues e.g. by creating new taxes. This research assesses the effect of the previous factors on the economy, based on statistical comparisons with other European countries. Moreover, it uses comparisons in order to assess the effect that other factors may have on the economy, particularly the trade balance, industrial production and entrepreneurship.