Policy Article

Greece: How to Take a Turn for the Better

Kiel Policy Briefs, 83

Against the backdrop of the Greek parliamentary elections of January 2015 the study  answers the question whether the Greek economy is recovering from the deep economic crisis and, particularly, whether the country has made any progress towards structural change. The IfW researchers Klaus Schrader, David Benček and Claus-Friedrich Laaser analyse Greece’s economic potential and evaluate whether Greece’s public debt may be sustainable. The results of their analysis are rather pessimistic: Greece still lacks a new business model that could generate sustainable economic growth. The reform process has to be sped up and professionalized significantly. In the authors’ opinion a further haircut in favour of Greece seems inevitable, but with the qualification of a restricted fiscal sovereignty and the omission of further bailout packages.