Documents Pierros, Christos 4 results

"This article explores how the impact of the 2022–2023 inflationary episode was managed in Greece, and explains how labour market governance framed public policy responses. Greece resembles other southern European countries in the chronic weakness of its institutional preconditions for managing emerging inflationary pressures in a coordinated manner. Greece is also different, however, in that the previous two economic shocks had left a legacy of drastically diminished collective bargaining, financially vulnerable households and a public debt-to-GDP ratio close to 200 per cent. We show that, in a context of weakened trade unions and collective bargaining institutions, the response of wages to inflation was anaemic, while profits grew strongly, especially in oligopolistic product markets. We also discuss how, in order to ease the cost-of-living crisis, the government resorted mainly to untargeted support measures with a regressive distributional impact. We conclude by reflecting on what our findings imply for Greece's quest for a more sustainable and more inclusive growth model."

"Starting from the view that the crises in the euro zone were basically triggered by financial markets and reinforced by a lack of instruments for effective economic policy at the EMU level (Economic and Monetary Union), this working paper contributes to the ongoing debate on how to reform the Eurozone. The paper proposes a focus on general principles for fiscal governance reform aiming at a better economic, social and environmental performance on the part of EMU. As the main principles for progressive governance, the authors identify a need for: a much more active and prominent role for fiscal policy; ‘safer' government bonds; more and better coordination between fiscal and other economic, social and environmental policies, as well as between member states, to foster sustainable well-being; and more democratic participation and scrutiny."

"This chapter examines the recent evolution of inflation and its drivers in Greece, as well as the policies undertaken to limit its increase and mitigate its impact on households and firms. Greece is an interesting case as the current inflationary episode and the challenges it creates for real incomes is the third major economic shock that the country and its population have undergone since 2010, following the public debt crisis and the Covid-19 pandemic, from which the economy had just recovered. As elsewhere in the Euro Area, energy inflation has been the main driver of the Greek headline inflation and we illustrate the various reasons why this has been so, most notably the high natural gas distribution costs (a consequence of high market concentration) with its impact on electricity costs, and the elevated indirect taxes on energy. Inflation has had a detrimental effect on wage earners in Greece with real wages falling, while the wage share has also been in steady decline. Profit shares have been holding up or even increasing, suggesting a regressive effect from inflation. The Greek government has been going to great lengths to mitigate the impact of energy inflation on households and companies and to limit its rise, spending €9.8bn or 5.4% of GDP between September 2021 and October 2022, the fourth highest percentage of GDP in the EU, mostly on horizontal subsidies, without income criteria, or, until October 2022, even any incentives to reduce energy demand. A preliminary assessment of these measures suggests that inadequate targeting of vulnerable households means that, despite the high levels of expenditure, policy has not substantially alleviated the regressive impact of inflation, especially on households with lingering financial fragility from the previous two economic shocks experienced since 2010."