Under certain conditions, it will take about ten years for Greece’s GDP per capita as a percentage of the corresponding European level to return to premorandum levels, economists have calculated, the Prime Minister and the economic apparatus of the government state. that over the next four years, the focus of economic policy will shift from tax cuts to higher wages and incomes.

Indeed, apart from ENFIA, the memorandum’s hard legacy has been a decline in revenues. Average GDP per capita in terms of purchasing power from 85% of the EU average. which was in 2010 has fallen to 64% in 2021, the second lowest after Bulgaria. Other countries included in the program experienced similar but not as dramatic changes, with Portugal’s GDP per capita falling from 83% of the European average to 75% over the same period. In contrast, the former Eastern countries have taken steps in the opposite direction: Bulgaria has grown from 45% to 57% of average European GDP per capita.

In absolute terms, real GDP per capita fell from €20,150 in 2010 to €17,610 in 2021, while in contrast to the Eurozone it rose from €28,460 to €30,690 over the same period. And the average annual salary is currently 15,879 euros, which is the 5th lowest in the EU, where the average is 33,511 euros.

There is no doubt that something needs to be done here. Tax cuts over the previous four years seem to have improved middle-class incomes (median income increased from €7,120 in 2015 to €8,322 in 2021), but they have their limits.

To boost revenue, plans currently include:

• Further cuts in insurance premiums while there are fiscal options. The 0.7% rate remains to meet the 5 percentage point overall cut in social security contributions that the government promised at the beginning of this term.

• A new civil servants’ payroll estimated at €500 million in the 2024 budget. The possibility of finding additional opportunities for income support is being considered.

In a decade, and under certain conditions, GDP per capita may reach premorandum levels.

• New increase in the minimum wage.

• An increase in pensions based on the Katrugalu law. Finance Minister Christos Staikouras has already spoken of a 3.5% increase next year.

However, in the private sector, apart from the minimum wage, raising incomes is more complex and not only achieved through government decisions. There, Deputy Finance Minister Thodoros Skilakakis told K, “The key is to continue investment, increase labor force participation, including moving from informal to formal employment, and boosting productivity through reforms.” .

With growth rates averaging around 3%, according to Michalis Argirou, President of the Council of Economic Experts and Professor of the University of Piraeus, we could return to 75-80% of average GDP per capita in the EU at the end of this decade.E. He believes that an average growth rate of 3% during this period is possible, as the country will have the resources and reforms of the Recovery Fund, and will continue to attract foreign direct investment, since it is “an emerging economy with growth prospects, and at the same time time it has the security and predictability of an advanced economy, a eurozone member state and the EU.” It also reminds us that something similar has been achieved in previous years by the former countries of the East. He also emphasizes the importance of supporting the reforms of the critical social mass, which was not the case in the past.

Thus, maintaining and strengthening the dynamics of reforms is the main condition for increasing the incomes of Greek citizens. “Higher wages mean better jobs, and therefore there is only one right way: to attract new investment,” says Panagiotis Kapopoulos, chief economist at Alpha Bank, contrasting this with the practice of increasing income through increasing debt, as was done in the past.

Analysts even seem to agree on reforms that should be prioritized to increase investment and productivity: speeding up the administration of justice is now highlighted as the most important, and further digitalization of the state, training of the workforce is also emphasized. potential, further consolidation of banks with a reduction in NPLs. Maintaining financial discipline is an obvious addition.