Abstract
The Greek economy has started to move away from an unsustainable growth model to a new model which offers the prospect of robust economic growth. The share of the tradable sector in total output started to expand, supported by a large fall in unit labour costs, while various structural reforms have already been implemented. Deep recessions have been generally followed by quick recoveries and the global environment is now more supportive. While further fiscal consolidation is needed, its magnitude is not so large and an eventual economic recovery would help to meet the fiscal targets, while another round of debt restructuring would benefit Greece. Yet in the near term the economy will likely deteriorate due to the uncertainties of the first half of 2015 and the introduction of capital controls, and in the medium term economic growth will crucially depend on the conclusion and implementation of a comprehensive financial assistance programme.
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