President Biden’s announcement of a major package to ease the transition of US industry to clean energy and environmental sustainability raised concerns about its impact on European industry. Joe Biden, in order to finance the planned spending, is canceling the equivalent general tax credits for businesses that Trump has provided. If this is done, the impact on the budget will be zero, and support will be tied to specific goals, not just to increase profits. Germany also announced a 200 billion euro three-year plan to support its industry in response to rising energy prices. At the same time, there was a need for a more general European intervention along the lines of the Recovery and Resilience Fund.

In Greece, the industry recently approached the prime minister for significant energy cost concerns, asking for government support. Energy costs are a longstanding problem in Greek industry. In addition, it is also getting bigger due to political interventions in the energy sector. Since governments are responsible for the cost of energy to businesses and consumers (PPC, how prices are calculated, etc.), they must face the consequences.

Today again (after 1973-74, 1979-80, 1980s, after 2009) the Greek industry faces serious threats. Over forty years, its contribution to GDP has fallen from 21% in 1981 to 9% in 2021. Deindustrialization in favor of services is erroneously viewed as a statistical change in the shares of these two sectors in GDP. This meant two major qualitative upheavals. The first concerns our inability to prevent such a significant decline, which puts the country in fourth place in the EU after Malta, Cyprus and Luxembourg. Secondly, in both industry and services, we have a common weakness: the weak presence of the elements of knowledge, know-how, technological background and innovation that today internationally define the competitive base of each country. Greece has advanced in these forty years, but it has also fallen behind, like many other countries have progressed by leaps and bounds. Thus, the role of industry should be viewed from a perspective that goes beyond the current situation. Otherwise, we will again and again come to new serious problems, which each time will seem to be caused by the situation, while they are of a structural nature.

In practice, the distinction between industry and services is no longer as important as it used to be. The superiority of industry was due to its relatively high productivity, multiplier effect and dynamism. Now, the integration of powerful forms of knowledge and technology into many new forms of services has resulted in their productivity exceeding that of industry. Industry and services play interrelated and complementary roles in economic development that are complexly interrelated. However, in Greece, the sectoral composition and productivity of both industry and services show an extremely serious asymmetry between industry and services, such that even the service sector as a whole has a comparatively lower productivity than industry, and, moreover, productivity in both sectors lags far behind developed or similar countries (Spain, Portugal). Tourism or trade has little impact compared to telecommunications, IT activities or other services. Selling real estate through shares – selling silver coins – generates income, but not growth, unless they lead to new investments. In addition, some services, by their very nature, are not exportable and therefore cannot prevent the continued deterioration of the balance of payments, which is dangerously burdening a country’s economic growth. These characteristics determine the long-term evolution of the overall productivity of the economy, the average annual growth of which in the twenty-year period 2000-2019. was negative for Greece, against the background of much larger growth in the EU-19, as well as in Portugal and Spain, two logically comparable cases. Someone will say, but we had a crisis for 12 of these 20 years. Exactly. The crisis that we had was also the result of internal weaknesses in both the production system and the way of management.

Low productivity in Greece has another extremely decisive effect: long-term low wage stagnation for workers, social and political tensions and immigration. The percentage of employees with gross salaries below 1,200 euros (that is, a net salary of less than 1,000 euros) is approximately 63% of the total. This is another extremely important issue that cannot be discussed in this context.

Without a critical mass of industrial base and advanced services, the country will oscillate between scarcity and temporary respite.

However, the central element that distinguishes the strategies of other developed countries from Greece, whether in industry or services, lies not only in quantitative, but mainly in qualitative goals. The United States, Germany, France, South Korea and other countries, through productive transformation programs, are counting on a leap into the future: the emergence of new activities closely related to advanced technologies, innovation, climate change, energy, in general, major changes and threats that are removed. They give meaning to tomorrow instead of obsessing about preserving the old at all costs. In Greece, our inability to create new industries and serious industrial enterprises makes us focus on preserving the past (troubled enterprises in the 1970s and 1980s, unstable state-owned enterprises in each period, bad loans and bailouts of enterprises that will never repay them) . paying a high price: failure to implement more effective social and development policies. We do not have information about the creation of new production structures through government policy in any area (energy, medical technology, pharmaceuticals, agriculture, climate change, etc.). If I’m wrong, these will be exceptions. Hotly debated start-ups are an interesting product of private initiatives, but still have little weight in the functioning of the economy.

There is one more difference. Developed countries understand the importance of investment activity instead of consumption for the development of their production system. Throughout the post-colonial period, Greece has upset the balance between strengthening its industrial base and redistributing and placing an asymmetric weight in politics on consumption. One might wonder about the consequences of such a choice: how much it enhances social protection and why periodically our macroeconomic imbalances again and again become the central problem of politics and society, throwing off the standard of living of millions of households.

This reality is in direct contrast to the really attractive but unrealistic idea that we can gallop closer to the fourth industrial revolution. Theoretically yes. Until we forget that we broke down and abandoned the race for the second time. It does not predispose to failure. However, he makes three points: that a country’s involvement in critical development transformations does not happen without a backdrop, without sacrifices, without specialized goals, without investment in new knowledge and new technologies, and that tax incentives a la Trump do not have an incentive for development. effect, and that our track record does not make such expectations possible.

Ultimately, the question is how do we not run out. For decades, governments and the industrial world have been reluctant to follow the example of other countries or the EU. For many reasons, Greece needs industry as well as high-tech services. Without a critical mass of industrial base and advanced services, the country will oscillate between scarcity and temporary respite. The current low productivity in industry and services means that high growth rates are not possible on a systematic basis. It also explains the indirect ways that governments use to achieve – temporarily – a little more growth or revenue: excessive lending, the widespread sale of real estate to non-Greek organizations, tax evasion.

How the strengthening of industry or technologically advanced services is achieved sets important preconditions for policy and entrepreneurship. The answer cannot be given in articles of this format, or by means of superficial analyzes of the communicative type, which systematically fail. Pointing out the importance of education, research, emphasis on new dynamic areas, and the like is general, banal, and unhelpful. Greece is separated by a huge gap in productive, political and social perception from many other countries than it was fifty years ago. These gaps will not be closed in five or even ten years, and in today’s conditions have much more serious consequences than they seem. Does this mean rejection? This means a need for greater responsibility, an obsession with development, selectivity, planning, and forms of political transcendence.

Mr. Thassos Giannitsis is a former minister.