Everywhere equality and justice, higher wages and pensions, prosperity for all. Radical improvements in health and education systems. Creation of modern public administration. Protection of the first house. Signing of collective agreements. Strengthening small and medium enterprises, farmers and the poor. This is the main axis of the proposed programs of almost all parties. Paradoxically, this is a long list that essentially refers to the pathologies of the Greek economy and society. It’s as if all parties agree that “evil” exists everywhere and must be cured. The question is how? Undoubtedly, rampant opportunism perpetuates these pathogens.

In November 2020, the “Greek Economic Development Plan” was published, also known as the Pissarides report (Nobel Prize in Economics in 2010), although it is a collective work of many famous professors and economic figures. This study, like many others that have preceded it, shows that the Greek economy has been characterized over time by both underperforming productivity and low participation of productive factors such as labour, capital and technology. As a result, we have income stagnation, widening trade deficits, and widening budget deficits due to continued subsidization of services and incomes. A vicious circle without beginning or end, perpetuating an outdated redistributive economic model with no prospect of development or sustainability. Aspects of this model are the excessive number of small businesses, self-employed and minimum wage workers in services and unskilled labor. All this supports a network of undeclared work and tax evasion, as well as a large number of citizens dependent on subsidy programs. Over time, any forms of processing, the use of new technologies, extraversion and the production of competitive products are in demand. Even greater demand, industrial production, causes the attraction of foreign direct investment in production activities that ensure economic growth with a long-term perspective, high wages and participation in the international division of labor and production.

Yet there is hope that the vicious circle will close. Pissarides’ report points to this. Hope comes from three successive crises that we have lived through since 2010 to date: the public debt crisis, the pandemic, and the recent energy crisis. The notorious adjustment programs, in addition to the impact on the income of workers and pensioners, in addition to the peak of unemployment at an unprecedented level (28%), in addition to social upheavals and political reshuffles, have led to adjustments and balance sheets in the most painful way. that so governments stubbornly refused to realize and organized interests to understand. However, as the Pissarides report states, “the twin deficits, the fiscal balance and the balance of payments, were balanced, while competitiveness was boosted by lower unit labor costs.” The COVID-19 pandemic has pushed us to the brink, but we persevered. The European Union, with its generous support programs, has kept the Greek economy afloat, preventing a prolonged and deep recession and providing sufficient basic income, especially for the most vulnerable households. The energy crisis resulting from the war in Ukraine had a double effect: a surge in energy prices and inflation, as well as the relatively quick prevention of an uncontrolled recession and the creation of conditions for greater European Union cohesion. , solidarity and economic interdependence. So, three crises, which, in the most paradoxical and unexpected way, gave rise to an opportunity for a new model of development for our country.

In planning for the future, Greek governments must figure out how to capitalize on two simultaneous tectonic changes. First, the manufacturing process is fragmented. This enables the production of high-tech and medium-tech components in Greece for multinational companies that manufacture and sell products in Greece and abroad. Greece is almost impossible to attract to install large and integrated production units due to the lack of “coexistence” of the wide range of necessary comparative plans that foreign investors find in countries such as China, Turkey, Mexico and even Spain. Secondly, the same is proportional to the division of labor. Now, in the era of digitization of work, specialized personnel can work in Greece, and the product of their work can be integrated into an industrial product or service outside of Greece.

Thus, the new production model should be aimed at creating incentives for internal development or attracting medium-sized production units, preferably high-tech ones, to be integrated into European production networks. A prerequisite is the creation of modern infrastructures, such as road and rail transport networks, access to digital communication networks, the correlation of university and technical training with the labor market. Education at all levels, as well as the health care system, must acquire the features of a modern state – two great achievements of developed societies. Equally necessary is the timely, transparent and credible modernization of the Greek public administration and administration of justice.

Rampant rewards perpetuate the pathologies that parties promise to cure during the campaign.

All of the above have money. The resources from the European Cohesion Programs and the Recovery and Resilience Fund that are available to Greece create a budgetary reserve that, if used effectively, can have a high growth and production multiplier that our country does not have. seen for decades. As an example, it should be mentioned that only two European programs, NextGenerationEU and NSRF 2021-27, provide subsidies and loans for Greece alone, totaling 60 billion euros.

Recently E.E. established a new special state aid fund for the development of industries in the EU as an antidote to Chinese trade competition and US protectionism. It is noteworthy that this program provides for a proportional distribution of resources to ensure the most balanced development within the EU. It also opens up prospects for Member States that lack the financial capacity to provide assistance to their crafts and industries, such as Greece, and to bridge part of the gap left by the lack of private investment. At present, the attraction of foreign capital to create incentives with tax exemptions or a special regime of shareholder rights is of secondary importance, since European legislation has established a uniform policy in these matters. These financial instruments and the unification of the rules governing investment in the EU. it is the context of emerging “opportunities” for our country.

No one objects to the existence of a system of social benefits and preferential policies. Every modern economy must have, protect and expand these benefits in accordance with its capabilities. However, intertemporal subsidized growth in consumption income is neither desirable nor sustainable in the long run. The main task of the modern economy is to create conditions for the production of wealth through the production process and its fair and proportional distribution. If you remember Darwin, it is not the strongest or the smartest who survive, but those who adapt best to change.

Mr. Giorgos Stoumpos was Professor of Political Economy and Executive Director of the Bank of Greece.