While all labor cost and competitiveness indexes somehow reflect the
fall of employee compensation in Greece, reflecting the success of the
Troika policy to internally devalue incomes, the revival of export-led
growth anticipated by the Troika has, so far, failed to materialize.
We only need to look at wages in each sector to see that the
competitive parts of the economy never suffered from excessive wages in
the first place: Reducing private sector wages did little to make the
Greek economy more competitive because this was never the real problem.[1]
Rather, the main reason why private economy competitiveness was held
back centered on rent-seeking regulation that preserved oligopolistic
structures in product markets, stifled competition-creating rents, and
increased the cost of introducing innovations in production and supply
lines, all of which would allow productive ecosystems[2] to evolve and research based innovation to increase.[3]
Why Internal Devaluation is Not Leading to Export-Led Growth in Greece | Brookings Institution
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