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Greek Economy Needs Growth Strategy

Author

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  • Karl Brenke

Abstract

Greece has been living beyond its means for a long time now and has accumulated foreign debt. The high level of national debt is merely a reflection of the problems; the actual cause is insufficient economic power. The top-priority political objective is to strengthen the substance of the economy-in particular, the export base-to such an extent that in future, the balance of payments is at least equalized. This means Greece needs a growth strategy to catch-up industrialization. So far, revenue in the economic exchange with other countries has been mainly generated by tourism. However, this pillar is far from sufficient; although there are growth prospects in tourism in southern Europe, these should not be overestimated. On the other hand, Greece's industrial base is only small and heavily biased towards the domestic market. Its production structure and foreign trade links for goods show that the Greek economy presents virtually no competition for developed industrialized nations. Consequently, contrary to claims, the wage restraint in Germany has not put the Greek economy under significant pressure, either. The manufacturing sector and large sections of the economy are to a large extent marked by small-scale production. Overall, in Greece, there is one self-employed worker for every two employees; the employment structure more typical of a transition economy.

Suggested Citation

  • Karl Brenke, 2012. "Greek Economy Needs Growth Strategy," DIW Economic Bulletin, DIW Berlin, German Institute for Economic Research, vol. 2(3), pages 3-15.
  • Handle: RePEc:diw:diwdeb:2012-3-1
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    File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.394094.de/diw_econ_bull_2012-03-1.pdf
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    Citations

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    Cited by:

    1. Elias Sanidas, 2014. "The Greek Non-Paradigm of Economic and Business Development, and Comparisons with South Korea," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 64(3), pages 30-48, July-Sept.
    2. Benedikt Herrmann & Alexander Kritikos, 2013. "Growing out of the crisis: hidden assets to Greece's transition to an innovation economy," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-23, December.

    More about this item

    Keywords

    Greece; economic structures and problems;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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