Page 43 - COMPASS - COMPETITIVENESS REPORT 2021 | COUNCIL OF COMPETITIVENESS IN GREECE

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Christian Ketels

Harvard Business School faculty at Professor Michael E. Porter’s
Institute for Strategy and Competitiveness

Building back better – how the COMPASS can

help Greece

The pandemic has ravaged countries globally. Europe, in particular, has suffered both
deep human and economic costs. Greece, too, has not been spared. When the pandemic
first hit in the spring of last year, the number of cases and COVID-related deaths was
relatively modest. But the second and third waves have now hit the country hard. Greece’
economy, too, has suffered; not surprising for a country that is particularly reliant on its
tourism sector. The GDP drop in 2020 was worse than for the Euro-Zone and the EU
overall; latest estimates are somewhere between -8% and -10% drop in GDP during 2020.
And the recovery in 2021 is likely to be weaker than elsewhere in Europe, with stronger
growth expected only in 2022.

How can Greece respond to this crisis in ways that paves the path towards high and
sustainable improvements in competitiveness and prosperity? The COMPASS is providing
key input towards providing an evidence-based answer to this question. It comes at a
critical time: The Next Generation EU program will provide significant fiscal resources to
Greece through the Recovery and Resilience Fund (RRF); the government communicated
its draft plans for using these funds in late 2020.

The COMPASS, adding to the work of the Pissarides-Commission and others, shows a
unique willingness to ground such policy action in a thorough analysis of the challenges
that have held the Greek economy back for so long. One observation from the data is
that Greece’ prosperity is now generally in line with its fundamental competitiveness. The
growing gap between prosperity and competitiveness had been a key trigger of the Greek
and European sovereign debt crisis. Many of the policy steps taken since have aimed to
attain balance between two. This has now been achieved. But at a level of prosperity that
is modest in comparison with many of Greece’ peers in Europe, and below the aspirations
Greek society has for itself.