For the past 60 years, the world has been built around the so-called “Washington Consensus”. This “consensus” was based on the logic of the free market (laissez-faire). An economy that has exclusively contributed to freedom of movement, tax cuts, privatization and trade liberalization.

There were many basic statements and assumptions on which the Washington Consensus was based. While the benefits were significant, it is clear that some of the initial assumptions were wrong.

One was that the allocation of capital would always be carried out efficiently and effectively by the markets, no matter how competitors acted. Instead, in Greece, we saw entire distribution networks of strategic goods, as well as the industries and jobs that created them, move overseas. This focus on efficiency has made timely inventory management a key feature of running a business.

Another false claim was that any development was welcome. Any negative effects such as social cohesion, climate, jobs, etc. were only collateral damage. Access to cheap goods and services and buying the latest iPhone were more important than meaningful work.

The political assumption underlying all this logic was that commercial growth would lead to general growth and that the benefits would be shared equally among all citizens. In reality, however, these gains did not seep into or reach the majority of the workers.

The economic crisis, coupled with the pandemic, has highlighted the fallacy of the Washington Consensus’ premises. At the same time, it became clear that bringing countries together under an umbrella, in the form of an economic union, on which international economic policy has been based in recent decades, is not a particularly functional solution. All of the above, plus the emergence of China as a rising power, the withdrawal of the US in the Middle East, transportation and supply chain issues brought on by COVID, and the potential end of the Russian Empire, have mobilized Americans to find a solution.

So last week US National Security Adviser Jake Sullivan unveiled the New Washington Consensus, which will be based on the following pillars:

a) Focus on domestic industrial policy, since prioritizing the banking economy over the real economy has been a mistake so far. b) Alliances with other states are welcome. c) Combating the climate crisis, which is expected to create new jobs. At the same time, the United States must ensure access to renewable energy sources and not become a subject of controversy, as it was with oil in the 20th century and natural gas in 2022.

Sullivan’s main message is that the Americans are ready to build an industrial empire at any cost, so that neither a pandemic, nor a flood, nor a catastrophe affects the United States. At the same time, as part of friend-shoring, he invited developing and developed countries to help build this empire. These changes are expected to benefit the working class and reduce inequality.

The economic crisis, coupled with the pandemic, has highlighted the fallacy of the Washington Consensus’ premises.

Christine Lagarde, in her last speech, adopted these thoughts for the ECB. Among other threats, he named the fragmentation of the world economy into competing blocs, disputes over energy and the possible loss of the reserve currency. To address this issue, he stated that “fiscal and structural policy will focus on removing the constraints created by today’s geopolitics. For example, sustainable supply chains will be secured and new energy production structures will be created. Industrial policy is back and clearly supported by the Central Bank.”

Here the question arises as to what Greece should do in this new order of things.

First, since it’s unlikely that we’ll see Greeks carrying suitcases of yuan to Beijing and rubles to Moscow, it’s probably better economically to stay close, very close to American interests.

Secondly, as the US has done, it would be wise to bring supply chains as close to us as possible, while recognizing that because we are a small country with complex geography, we have a limit to what we can do in this area.

Thirdly, it is important to understand that as the EU develops, we cannot remain fully committed to it. Mostly due to events in Germany, where the country is getting poorer due to its demographics and rising energy prices.

On the contrary, as the world becomes more and more complex, it would be beneficial for our country to build relations of friendship and trust with as many countries as possible in order to attract the greatest possible investment interest of foreign powers to Greece. Such friendship-alliances with countries that want to protect their investments in any difficult times, as Germany has been doing with Turkey for several years, can be very important in the future.

An important step in this direction has already been taken with the signing of a memorandum of cooperation between the governments of Greece and the UAE. An example of such cooperation is the creation of a €400 million co-investment platform jointly managed by the investment company Mubadala and the Hellenic Development Investment Bank (EATE). It is important to emphasize that this new policy by both the US and the ECB may initially lead to higher inflation. However, in the long run, productivity growth and the balancing forces of technology and demographics could drive prices down.

Since Greece is the country with the highest debt-to-GDP ratio, interest rates matter. So the question is whether Greece will be prepared for this new inflationary shock. Be that as it may, the country must prepare for this new chapter of a multifaceted plan.

Mr. Jason Manolopoulos is the co-founder of investment firm L-Stone Capital and the author of Greece’s Burdensome Debt.