The Brussels Hellenic Network ARGO organized the 30 January 2020, a dinner and conference by Nicos Christodoulakis, ex Minister of finance and economy, Greece, Professor at the Athens University of Economics & Business, and member of the Hellenic Observatory, LSE. The theme of the conference was “Greece and the Euro Area: the cost of weak institutions”.  

Participants and invitees included several senior officials of the EU Institutions, as well many members of ARGO. The discussion that followed the presentation has been very interesting and fruitful.

Taking his quantitative and qualitative analysis of the Greek case in a decade of crisis and successive adjustment programmes, as a starting point (see attached), professor N. Christodoulakis has reached some key conclusions about the cost of weak institutions for Greece and the entire euro area.

More particularly, he stressed that in the second decade of the Economic and Monetary Union, the convergence process between the less and the more developed members of the Euro Area weakened significantly, as disparities in the growth slowdown after the global financial crisis caused asymmetric losses in terms of per capita income, and of course in the levels of public and private investment, as percentage of   Member States GDP.

The most pronounced divergence took place between Greece and its Euro Area peers as the front-loaded austerity measures led to a serial collapsing of growth. At the same time, Greece suffered from a dramatic deterioration of institutions, ranging from serious blows in Government effectiveness and political stability to market distortions and several challenges to the rule of law.

The economic and social impact of such negative developments  on institutions is estimated, and  found to be so significant that Greece - alongside with macroeconomic stabilization - should urgently focus on improving institutions, if a convergence process toward the more developed nations of the Euro Area is to set off again.

Taking the Greek case as a starting point, Professor N. Christodoulakis and participants have reached the conclusion that weak institutions in several Member States and/or Regions of the euro area have a strong negative effect not only on these individual MS or Regions, but also on the entire euro area, in economic, political and social terms. This necessitates coordinated plans and joint action, both at euro area level and at national /regional levels, with a view to improving institutions and addressing the convergence and cohesion challenges. 

Photos: https://www.dropbox.com/sh/6ni3c7cq9guv0ov/AADcj7EAH6S5MRyGGeJCFnyza?dl=0 
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