Smaller but unreformed corporate economy
In 2018, Greece officially exited the longest and deepest crisis that has been recorded in the Western world. Eight years of constant drop of economic activity, one could imagine that the productive tissue of the country has been destroyed.
There was a huge value loss in the corporate economy, as company valuations recorded a 72% decline, but after 2012 equity values have recovered.
Few things changed in the structure of the economy as a result of the crisis. Even though the top companies in all sectors shrank in size, most of them remained in the same position while there were no new market share contenders.
The economy did not transform as a result of the economic shock. Instead, it mostly retained its structure, resisted change, drained from investment, its technological base weakened and lost value added
Swift cost adjustment
The crisis caused losses in the demand within the Greek economy, reaching a 12% decline compared to 2009. Under this pressure, Greek companies contained their operating costs by 11% and focused on operating profitability to counterbalance the loss
Less complexity and value added
Economic activity moved from services and constructions towards industry and tourism, but also towards lower added value and less embedded technology
A marked change in funding
During the crisis, the cost of funding rose and remained at high levels, corporates continued the systematic deleveraging and eliminated their working capital which led gradually to accumulation of cash
Lack of investment
There was a large reduction in investment despite the fact that the funding capacity of the companies seems to have recovered
As a result of investment, the economy will be rebalanced to higher value added services and products and expand into new markets. Coherent sectoral public policies promoting size, concessionary funding towards last stage R&D, demand and supply aggregation and clustering are necessary in facilitating this shift