Greek economy shrank in crisis but did not reform-PwC

Greek economy shrank in crisis but did not reform-PwC

Greece's economy shrank severely during the crisis years but failed to reform and prepare for the future, says PwC.

In August last year, Greece exited its third bailout as the economy started to recover but growth remains anemic amidst low investment and consumption levels.

In a report titled "10 years of crisis", PwC said the way the Greek economy has developed "is incompatible with systematic growth."

As a sign that little has changed in Greece during the ten year downturn, PwC points out that the ten largest non financial companies (based on revenue) are the same ones as in 2009, with the only change. Supermarket chain Marinopoulos slipped out of the top ten, while cement company Titan crept into it. See top ten list here

"The economy did not transform as a result of the economic shock," says PwC, adding that instead the economy retained its structure, resisted change, was drained from investment and saw its technological base weaken.

Among the recommendations made to help get Greece on a solid growth path is the preparation of a clear plan for the future in order to reduce sovereign risk and attract strategic investors. At the same time, the economy must rebalance towards higher value added services and products and expand into new markets, says PwC, while zombie companies must be cleared from the corporate landscape at a fast pace.

"The banking system must be cleared from non performing loans, which absorb regulatory capital, so as to resume lending to the economy," said the report.

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