The story is more or less familiar: two impostors arrive in the capital of the imperial kingdom and promise to sew him new, magical clothes that only the “smart and capable” will see. The emperor and courtiers are persuaded to lie to themselves that the invisibility robe is great, but don’t look any less intelligent and capable until a small child screams that the emperor is naked and the prank ends and the evil tailors leave town. behind. .

When Andersen wrote The Emperor’s New Clothes, it is unlikely that he had in mind the impact of the lax production model on the country’s economy.

It has been more than a decade since the Greek economy found itself naked, the victim of a supposedly evolving production model based on runaway deficit creation and on “investment” that, instead of healing, flattered its diminished productivity. The remedy chosen as the most appropriate – although certainly not the most effective – was a catastrophic devaluation of labor without any structural intervention in the markets for products and goods. In other words, a combination of low wages and disproportionately high prices. More than a decade later, it is important to recognize that growth is improving, unemployment is falling, and employment is increasing. However, it is more important to recognize that we are at a time when it is the effects of treatment that undermine hopes for a sustainable recovery.

The Greek economy has experienced the historical consequences of the crisis, which exposed the failure of an outdated production model. However, ten years later, instead of experiencing the first results of the emergence of a new productive model focused on increasing business productivity, business extraversion and, above all, improving the quality of work, everything seemed to be stuck in the bowels of a vicious self-sustaining “unproductive cycle”. What are its main features? We restrict ourselves to two main ones.

The Greek economy has experienced the historical consequences of the crisis, which exposed the failure of an outdated production model.

Endless devaluation of labor: Greece continues to combine low productivity with equally low quality jobs. According to the OECD, in 2022 it ranked only 37th in terms of productivity among 40 countries, while according to Eurostat, 2022 was the absolute bottom in the EU. from “27”. At the same time, Greece continues to distance itself from the European average in all indicators that make up a measurable concept of the quality of work: workers work more, get paid less, have limited rights and fewer opportunities to work. assert themselves and, moreover, are employed in jobs that underestimate their skills and offer few opportunities for advancement. Since 2009, according to INE GSEE data, Greece has not ceased to increase its distance from the European average in the Composite Labor Quality Index, from a difference of 7 points in 2009 to more than 30 points in 2019. Strikingly, the apparent correlation Low labor productivity coupled with the low quality of jobs on offer seems unlikely to move Greek business, which in many cases believes that the only remedy is to devalue the labor force and lower the cost of labor.

Limited investment in high-value-added manufacturing sectors: November 2022 saw the highest monthly current account deficit in 15 years, with the goods deficit widening to 3.8 billion from 2.6 billion in November 2021. But no one right to be surprised at the difficulty of exporting for business. 2/3 of them still work in “labour-intensive” manufacturing sectors, and only 23% rely on “knowledge-intensive”, while only 32.22% of workers are employed in highly skilled jobs – again the worst figures in the eurozone. . At the same time, Greece ranks only 25th in the Digital Economy and Society Index (DESI) out of 27 countries. Asymmetric overdependence on tourism, despite any “good indicators”, not only does not change, but also confirms the dominant focus on entrepreneurial activity with low added value.

Based on the foregoing, it is clear that the Greek economy, despite its more than a decade of crisis, continues to buy old things for new ones and promote them by deceiving itself. No new development model can be based on rearguard action, which is why Greece remains a country where only 25% of workers are covered by collective bargaining agreements, minimum wages are set outside of collective bargaining agreements, and workers’ skills are constantly devalued. No national economy can rest on a permanent devaluation of labor or on a logic that favors opportunistic commercial profits over investment in innovative advanced manufacturing sectors. The new model of sustainable production remains in demand, and this time let’s close our ears to the “evil tailors”.

Mr. Christos Goulas, PhD, is the CEO of the GSEE Institute of Labor.