I was born, raised and worked as a politician for a long time in Central Macedonia, where for about three decades there was an economic feat that contributed to economic growth and prosperity. Geographically, the center of this development was the industrial zones of Greater Thessaloniki and the satellites of the corresponding economic zones of the present region of Central Macedonia. This success was based on three main principles: high-quality competitive production – processing, specialized work, extroversion. On these principles, concentric circles of thousands of connected enterprises developed, using organized road transport, as well as the railway, which reached all the important markets of Europe. The textile industry deserves special mention, where hundreds of large, small and medium-sized enterprises, fully exporting their products, employed thousands of workers, mostly skilled workers, who constituted a high-level workforce.

In the late 1980s, this prosperity collapsed almost suddenly as a result of the policies of globalization and the EU, which quickly invaded the country after the fall of the Berlin Wall. Immersed in neoliberal economic thinking, politicians in Europe and the US have unfortunately suddenly deregulated markets, removed the importance of geography, and encouraged businesses to migrate to places where labor was cheaper. In fact, in many cases the EU has subsidized the relocation of manufacturing plants from its member countries to third countries that have just joined the free economy. The result was literally tragic.

The vast majority of businesses have collapsed and thousands of jobs have been lost in a very short period of time. It is estimated that in two years, in the early 1990s, more than 20,000 female textile workers were lost, among others, in the vast region of Central Macedonia. These workers never returned to their jobs. They were out of work forever.

The results of these neo-liberal policies have certainly had some beneficial effects on consumers, who have benefited from cheap foreign production, and have also lifted billions of people out of poverty in developing countries. As emerging markets joined the free economy system, global inequality decreased and a new global middle class was born. The biggest beneficiaries of neoliberal globalization are China and transnational corporations.

But neoliberal policies have nonetheless created strong regional inequalities in EU member states. and USA. Nobel Prize-winning economist Joseph Stiglitz, who grew up in the Indiana Rust Belt, said that if you grew up in an area like his hometown, markets are inefficient for people. Indiana was home to a brutal steel industry that collapsed due to globalization. The same happened with Northern Greece, which, until the 1990s, the country’s industrial-production engine with a significant share in GDP, experienced a catastrophic loss of jobs and enterprises. Accordingly, the manufacturing base of the entire country was deforested. These are financial results. And a sharp drop in life and social status, disappointment, anger, as well as social division were fixed politically with the growth of anti-democratic sentiments, forces of populism and extremism.

At some point, the pandemic and the war will end, but globalization will not return to its previous level. Countries now need more efficient supply chains.

Consequently, the idea that the global economy should be reoriented to meet national and regional needs is beginning to gain momentum. It is clear that globalization is in retreat, at least in the area of ​​trade and capital flows. The financial crisis of 2008-2009, the pandemic, the war in Ukraine highlighted its vulnerabilities, from the energy crisis to supply chain problems. At some point, the pandemic and the war will end, but globalization will not return to its previous level. Countries now need more efficient supply chains. A very recent example of what the de-industrialization of Europe has led to is the shortage of essential pharmaceuticals due to the insufficient supply of raw materials from Asian markets. And climate change, along with its twin energy sister, and rising wages in many emerging markets, are reducing incentives to ship low-margin goods such as furniture or textiles.

Besides, what’s the point of talking about innovation without production? Innovations concern almost exclusively industrial production, as well as its results, such as energy saving. For example, 3D printing makes it possible to produce products quickly, easily and cheaply, and the production site is located as close as possible to the sales markets.

All these changes suggest that “regionalization” will gradually replace globalization as the dominant economic order. The EU published a few months ago a New Industrial Strategy that has a dual purpose, i.e. industrial development combined with climate change and energy goals.

The outlook for this new reality is bright. The New Economic Order is an opportunity for Greece to develop a bold industrial policy to dramatically increase the share of industrial production in the country’s GDP. We are called upon to play an important role in national competitiveness, the sustainability of the economy and, accordingly, society. This means, among other things, abandoning the economic mindset of deregulation, embracing the coming regionalization, and working to create productive economic opportunities.

* Mr. Michalis Chrysochoidis is a former minister.