Welcome

Posted on July 30, 2010 by The Reforming Economist

This blog publishes articles by leading academic economists on issues relevant to economic policy and reforms in Greece. The crisis in Greece is also a time of opportunity: ambitious reforms can be undertaken that will not only stave off bankruptcy, but also modernize Greece’s economy and raise the productivity and incomes of Greek citizens on a sustainable basis. The articles in this blog aim to offer constructive proposals and impartial analysis of potential, proposed or implemented reforms that are based on the principles of modern economics and on lessons from recent cutting-edge research.

The editors of this blog do not necessarily endorse the opinions expressed by other contributors to the blog, the agenda of any political party, or the views of those who link or otherwise refer to the blog and its contents. Comments that do not concern the ideas and arguments published in this blog, but consist of personal attacks will be deleted.

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The drachma path

Posted on May 18, 2012 by A_Koutras

Once more the scenarios of a possible Greek exit from the Eurozone are in fashion. We also see scenarios of a Greek exit from the EU. Most media and commentators replicate the mutterings of European or Greek or other investment experts. In this mess the conspiracy theories abound while some of the Greeks prepare for the day after others do not believe that it is possible. In this article, Andreas Koutras examines some of the key points. Is Europe bluffing and would never let Greece go? What is the financial cost to Europe? Would metastasis of the problem occur and can the risk be mitigated? What is the legal framework for exit? What are the steps of introducing a new currency. Would Greece thrive after the change or would it collapse to a failed state? Continue reading →

Posted in Banking and finance, Europe, Macroeconomics, Public finance | Leave a comment

Yannis Ioannides on Bloomberg Radio: “No rational economic debate surrounding the Greek elections”

Posted on May 10, 2012 by Y_Ioannides

In a Bloomberg interview, Yannis Ioannides argues that the Greek election outcome reflects the lack of serious, informed public debate on what is needed in order for the country to remain in the euro and fulfill her obligations under the agreements with the Troika. Briefly, he directs attention to the fact that there was little if any discussion on the role of the destruction of Greek institutions as a factor in the election outcome, nor serious public debate on such problems as corruption, the need for structural reforms, reform of the tax system, implementation of pro-growth policies, the need to change pessimistic expectations, all factors that keep sinking Greece deeper into the crisis. The interview here.

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Tools for development: ESET and research & technology

Posted on May 6, 2012 by M_Haliassos

Reforms in the way research is funded and in the extent to which it is linked to technology and innovation in industry provide important tools for putting Greece on a growth path. In this presentation, Prof. Stamatis Krimigis, Chairman of the National Council of Research and Technology (ESET), stresses the need for non-partisan, coordinated effort, for generous growth in funds for research in Greece, and also for a change of attitude towards funding of research projects. All these are crucial if research is to contribute significantly to economic development, utilization of the ample research potential that Greece has, and containment of the massive outflow of the best young Greek researchers prompted by the deep recession and the crisis of Greek institutions.  Continue reading →

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On the lack, the need, and the possibility of a reform dynamic

Posted on May 5, 2012 by N_Vettas

Nikos Vettas argues that the Greek economy can exit its current deep crisis only if a strong dynamic for reform develops. While this has been explained by many analysts since the crisis became apparent, the focus of economic policy in the last couple of years has been, with few exceptions, on fiscal tightening through austerity measures and on short-term tactical moves. Likewise, the political debate has largely avoided the question of how to genuinely reform the economy. See a related article (in Greek, Reporter.gr), interview (in French, Liberation) and quote (in English, BBC news) as well as a background paper on product market competition. Continue reading →

Posted in Education, Europe, Justice, Press, Product market, Public finance, Public sector productivity | Leave a comment

Greek Elections 2012—TV interview of Nicholas Economides

Posted on May 5, 2012 by N_Economides

In an interview with Bloomberg News TV, Nicholas Economides discusses the economic dilemmas facing the voters in the elections, and the impact of their decisions on Greece and the European Union. Α more extensive discussion at Chinese Radio International here.

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Can Greece reform? Higher education is a test case

Posted on April 25, 2012 by N_Vettas

Nikos Vettas argues that the delay in implementing the new law for the Greek Universities is extremely problematic. Not only because of the urgent need for improvement in the Education System itself, but also because it sends the wrong signal for the possibility of implementing any real reform in Greece.  In a recent article in Kathimerini, Vettas argues that a well functioning education system is key not only for economic growth but also for social justice and true democracy. The new law, adopted a few months ago by a very large parliamentary majority is certainly not perfect (see, for example, an alternative proposal submitted by Vettas in February 2011 during the relevant public consultation). However, it fixes many of the problems of the old regime and offers reasons for hope. Continue reading →

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Haircuts and growth — Radio interview of Nicholas Economides

Posted on April 3, 2012 by N_Economides

Nicholas Economides discusses recent economic developments at NET Radio on March 17, 2012. His main points are as follows. Although the Greek economy might require an additional haircut on loans, this will be hard to do given that most Greek borrowing is now bilateral loans with EU states and the IMF. It would have better to have implemented a haircut in May 2010 on all loans before they were transferred to the EU states and the IMF. Greece was totally unprepared for the measures of the first memorandum of May 2010, and very few of these measures was implemented by the Papandreou government. Presently Greece needs to cut expenses in the public sector and improve collection of taxes. Greece also needs desperately new investment. Improving the investment climate can be done by Greece starting joint investment programs with EU, US, and China, among others, primarily in renewable energy and tourism.

See http://www.stern.nyu.edu/networks/NET_radio_economides_1_03172012.mp3 and http://www.stern.nyu.edu/networks/NET_radio_economides_2_03172012.mp3

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The case for Greece staying in the Eurozone

Posted on March 20, 2012 by M_Makris

The debate on whether Greece should exit the Eurozone will almost certainly resurface in the run-up to the forthcoming elections in Greece. In the article below, Miltiadis Makris reviews the basic economic arguments in favour of a country’s Eurozone membership. He also argues that given Greece’s debt problems, the Eurozone debt crisis, and the characteristics of the Greek economy, Greece’s continuing membership of the Eurozone is in the interests of both Greece and its Eurozone partners. He finally discusses the issue of Eurozone members sharing the costs of resolving the Euro debt crisis, and why a quick solution to the crisis is very difficult. Continue reading →

Posted in Banking and finance, Europe, Public finance | 12 Comments

Greece at the PSI—TV Interview of Nicholas Economides

Posted on March 7, 2012 by N_Economides

As Greece exchanges its old bonds with higher quality bonds and imposes a “haicut” on the face value of the old bonds, Nicholas Economides discusses Greece’s prospects. He underlines the necessity of new investment initiatives that start with bilateral national agreements and are followed by private investments. TV interview at Xinhua http://www.youtube.com/watch?v=R6L4dBz3j-0.

Posted in Banking and finance, Economic development, Europe, Macroeconomics, Public finance | Leave a comment

Greece and the new rescue package

Posted on February 25, 2012 by M_Delis

Should Greece default on its debt? In an article published at Les Echos on 23 February 2012, Manthos Delis argues that default is not a prudent option. Even though the current public debate on the new rescue package is primarily about wage cuts and new taxes, the majority of policies in the new deal concern structural reforms for the Greek economy. Unfortunately, with few exceptions, only the recessionary policies were implemented in the recent past, and this contributed to the deepening of the recession. The structural reforms need to be implemented by the Greek government at an accelerated pace, but also the Troika needs to efficiently and swiftly provide technical support for (i) the absorption of liquidity to finance investment projects and (ii) the enhancement of the weak Greek institutions. In contrast, a bankruptcy will further weaken the Greek institutions, the quality capital will flee and the institutional deterioration will have long-term and devastating effects.

Posted in Banking and finance, Europe, Public finance | 2 Comments