ocp192_en

2. Macroeconomic and financial developmentsMindful of the drag on exports coming from poor institutions, the government has made improving exportperformance a key policy priority. Based on the April 2012 National Export Strategy, reforms are proceeding in three areassupported by significant technical assistance, from the Task Force for Technical Assistance to Greece (TFGR) and severalother institutions and Member States:• Trade facilitation: the government adopted a reform road-map in November 2012 aiming at reducing time and costs forGreek traders. The set of 25 actions includes simplifying issuing of licences and certificates, optimizing customsoperations and introducing digitized procedures.• Customs operations: the reforms focus on reducing and simplifying export procedures, implementing electronic customsprocedures and introducing a streamlined risk-based customs system. These reforms of pilot customs offices are in linewith advice of the World Customs Organization. Customs operations have shifted to 24/7 or double-shifts for exports inthe pilot offices of Athens airport and Piraeus Port. The Government simplified pre-customs for fresh fruits and fetacheese, and intends to streamline procedures for an additional five products in 2014. Key next steps are to enable fullyfledged e-customs, align risk assessment systems in line with EU best practices, implement automatic clearance for lowrisk declarations in all customs offices and to fully roll-out optimized procedures to all customs offices by end-2014.• Export promotion: The Greek authorities have merged HEPO (Hellenic Foreign Trade Board, responsible forimplementing the export policy of Greece) and Invest in Greece (Agency responsible for seeking, promoting andsupporting foreign direct investment into Greece) in order to support more effectively Greek companies in accessingforeign markets and to attract foreign investments.Notes* The measures of institutional quality used in the augmented gravity model are the following: the Global CompetitivenessIndicator (GCI) from the World Economic Forum; the World Bank Doing Business Distance to Frontier indicator (DB); theWorld Bank Worldwide Governance Indicator (WGI); the OECD Sustainable Governance Indicator (SGI). These indicatorswere examined separately in the gravity model for both exporter and partner countries.** For presentational reasons all indicators were rescaled to 100. Normally, the GCI ranks between 1 and 7, the DB between0 and 100, the WGI between -2.5 and 2.5 and the SGI between 0 and 10.ReferencesBöwer, Michou and Ungerer (2014, forthcoming), The Puzzle of the Missing Greek Exports, Economic Papers, DG ECFIN.2.2 FINANCIAL MARKET DEVELOPMENTS12. Reflecting a gradual improvement in the financial sentiment towards Greece, the GreekGovernment Bond spread and the Athens Stock Exchange index (ATHEX) continued to recoverthroughout the second half of 2013 and Q1 2014, and the government returned to the bondmarket. The spread between the 10-year Greek and German Government bonds declined in H2 2013,reaching a low of approximately 615 bps by November 2013. During Q1 2014, spreads continued adownward trend falling to approximately 494 bps by March 2014 (corresponding to a y-o-y 88%reduction), going back to pre-May 2010 levels. In April 2014, Greece’s first bond issuance in four yearshas met very strong demand; close to EUR 20 billion of orders were placed from about 600 investors onEUR 3 billion worth of 5-year bonds at an annual coupon of 4.75 percent. By mid-March 2014, theprices on the ATHEX increased by 30% y-o-y, returning to Q1 2011 levels. Similarly, the Greek bankindex has also improved, albeit with a fair amount of volatility. From end-June 2013 to date, the Greekbank index increased 45%, from a still depressed level. The index remained on average broadlyunchanged in March 2014.17