This Survey is published on the responsibility of the Economic and Development Review Committee of the OECD, which is charged with the examination of the economic situation of member countries.The economic situation and policies of Greece were reviewed by the Committee on 18 February 2020. The draft report was then revised in the light of the discussions and given final approval as the agreed report of the whole Committee on 29 June 2020.The Secretariat’s draft report was prepared for the Committee by Mauro Pisu and Tim Bulman, with contributions from Tatyana Teplova, under the supervision of Sebastian Barnes. Statistical research assistance was provided by Béatrice Guérard and editorial assistance by Heloise Wickramanayake and Michelle Ortiz. The previous Survey of Greece was issued in April 2018.Information about the latest as well as previous Surveys and more information about how Surveys are prepared is available at http://www.oecd.org/eco/surveys.

Greece has responded swiftly to the pandemic and has effectively limited infections, but the economy has been hit hard. As in other countries, containment measures, travel restrictions, social distancing and high uncertainty have led to a temporary but extraordinary drop in production and large loss of tourism demand and employment (Table 1). The government has responded with substantial packages to strengthen the health system, buttress incomes and liquidity, and support and restart sectors most affected by the shock, such as tourism. To reinvigorate the recovery, the government has set out an ambitious reform programme focused on boosting growth and investment.

Until the onset of the COVID-19 pandemic, structural reforms, improved competitiveness and fiscal credibility contributed to rising activity and incomes (, Panel A) while confidence had been increasing (, Panel B), reaching the highest levels since the great financial crisis. Job creation was reducing unemployment and buttressing consumption, and, along with the guaranteed minimum income and family support schemes, contributing to lower poverty. Rating agencies have upgraded Greece’s sovereign rating and outlook, and Greece has successfully returned to the international bond market. In early 2020, sovereign bond yields reached their lowest level since adopting the Euro.

Greece’s labour market entered the COVID-19 shock following several years of sustained employment growth and with wages picking up. Unemployment remained high and employment rates were low, especially among women, the young and older workers. The shock led to a sharp fall in labour force activity and has stalled new hiring. The improved social protection and temporary support measures have helped to support households’ incomes and protect jobs during the COVID-19 crisis. However, high tax and social security contribution rates, together with little in-work support for the low-paid, continue abetting high structural informality. This heightens insecurity – by excluding many workers from activation policies or social and employment protection – and weakens productivity. Boosting the capacity of employment services and activation policies would support the recovery from the COVID-19 shock, in addition to durably improving employment prospects especially of long-term unemployed. Giving workplaces further flexibility to adapt collective agreements to specific circumstances would help align wage growth with productivity developments and help businesses to weather the COVID-19 shock. Building on the population’s solid education levels by equipping workers with the skills needed by the labour market can support employment and incomes. This will require a substantial boost to professional education and training at all levels and ages. This chapter applies the 2018 OECD Jobs Strategy to Greece to identify reforms that can help to overcome the COVID-19 crisis and create a virtuous cycle between productivity, job creation, and well-being.