Even before the COVID-19 pandemic slammed Greece’s economy, the country’s ranking in The Heritage Foundation’s annual Index of Economic Freedom had lagged far behind most other members of the European Union for many years.
Although Greece’s overall economic freedom score increased by 2.2 points in the 2020 edition of the Index, it remains ranked 44th among the 45 countries in the Europe region, ahead of only Ukraine.
Its overall score is well below the regional average and slightly below the world average.
The Greek economy has been in the “mostly unfree” category since the beginning of the second Greek financial crisis in 2012. Growth of the gross domestic product since then likewise has been extremely depressed and was only just beginning to recover when the pandemic hit.
Now, according to Reuters, Greece’s economy is expected to contract by anywhere from -4.7% to -8.9% in 2020, dragged down in part by sharply reduced revenues from tourism and transportation, as well as a result of lower exports.
According to a Finance Ministry report cited by Reuters, the recession globally and in Greece will be deeper than the downturn after the 2008 financial crisis.
Greece ended up needing three bailouts from the European Commission, the European Central Bank, and the International Monetary Fund to recover from the 2008—and later, the 2012—financial crises.
As Yahoo Finance reports, the “crisis was sparked by reckless state spending and misreporting of fiscal data to the [European Union].”
According to the 2020 Index, the Greek government needs to improve both financial freedom and the investment climate to make up lost ground on the country’s competitiveness.
The shortcomings on other Index indicators must also be addressed, including inadequate enforcement of property rights and inadequately resourced anti-corruption institutions.
Greece was making slow but steady progress toward greater economic freedom before the pandemic. Its government should get back onto that upward trajectory as soon as it can.
This piece originally appeared in The Daily Signal