In an election race and with strong speculation that Greece will pass the doubles elections, the parties promise (large) salary increase, increase in minimum wage, increase in family allowances for civil servants, and “loose” university admission criteria. As a university student with thirty years of experience, I know first-hand that by allowing candidates to be admitted to Greek universities with reduced criteria, we undermine both the quality of the university education provided and the employment prospects of future graduates. with a decent salary.

But what about promises significant increase in wages (minimum and non-minimum)they must go hand in hand with his so-called foundations Greek economy. The above observation is of particular importance for the investment grade we want to recover. I remind you here that we have lost investment rating since the beginning of 2011. The return to the “living rooms” of the investment class is of particular importance for the Greek economy, to avoid both the excessive increase in the cost of borrowing the Greek state and its great differences. These developments also directly affect the cost of borrowing for Greek businesses, which is directly related to the cost of borrowing for the government.

The restoration of the investment level will be judged solely by the credibility of the program of the new state scheme.

According to a study by the author (with Professors T. Panagiotidis of the University of Macedonia and P. Bubaris of the Newcastle University School of Business), non-investment grade countries (and therefore Greece) maximize the opportunity for a credit rating upgrade if and up to as long as they significantly improve both their competitiveness and their financial image.

The international competitiveness of our country (which takes into account the relative cost of labor per unit of output) in two years, 2021-2022, has risen above the level at which it was before Greece joined the eurozone. Today’s pay raise, not related to increased productivity and further competitiveness, will act as a drag. And that’s because it sets the stage for both fiscal collapse and a decline in our country’s international competitiveness. To put it simply: if we manage to form a capable government (cooperative or autonomous), the rating agencies will not reward us with an investment rating.

This will be judged solely by the credibility of the program of the new government and only to the extent that we remain financially disciplined and internationally competitive!

* Mr Costas Milas is Professor of Finance at the University of Liverpool.