Wednesday, July 3, 2013

2013 Index of Economic Freedom

I have commented before on several occasions on the World Bank's Doing Business Report. In the 2013 report, Greece ranks #78 (only Albania, Croatia and Serbia rank behind Greece). The good news, though, is that Greece improved its position dramatically in the last year and belongs now to the top improvers worldwide.

The Heritage Foundation publishes a similar analysis, titled the "2013 Index of Economic Freedom". Below is the summary:

"Greece’s economic freedom score is 55.4, making its economy the 117th freest in the 2013 Index. Its score is the same as last year, reflecting substantial declines in property rights and financial freedom that largely offset improvements in six of the 10 economic freedoms. Greece is ranked 40th out of 43 countries in the Europe region, and its overall score is below the world and regional averages.

Compounding an environment of worsening competitiveness and political volatility in Greece is the continuing lack of economic freedom. Major fiscal weaknesses exposed and aggravated by the debt and employment crisis have not been sufficiently addressed as the country enters its fifth straight year of recession. Double-digit deficits and large increases in borrowing have continued even while multinational financing packages have been approved to keep the government solvent. Unemployment, particularly among young people, continues to rise, and adjustments in market conditions have been stifled or delayed by public unions and other special interests.

As the Greek economy continues to undergo an extended period of economic and political turmoil, bold and committed policy actions are critically needed to restore fiscal sustainability, enhance labor market flexibility, and tackle systemic corruption".

The task ahead for the Greek government seems enormous!

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