Greece’s other deficit

Financial Mirror (Cyprus) - - FRONT PAGE -

For the past decade, much at­ten­tion has been paid to Greece’s pub­lic fi­nances. And when, in Novem­ber, the coun­try faced the first re­view of its re­form progress un­der its lat­est agree­ment with its cred­i­tors – an ex­er­cise re­quired to ob­tain a new in­fu­sion of bailout funds – its bud­get deficit was put un­der the mi­cro­scope once again.

But Greeks would do well to con­sider an­other type of deficit – one that has re­ceived far less pub­lic scru­tiny, but could have eco­nomic con­se­quences that are just as se­ri­ous. Like the rest of the Mediter­ranean re­gion (and in­deed the en­tire world), Greece is not just run­ning a fis­cal deficit; it is also run­ning an eco­log­i­cal one.

Ac­cord­ing to our anal­y­sis, Mediter­ranean coun­tries cur­rently use 2.5 times more eco­log­i­cal re­sources and ser­vices than their ecosys­tems can re­new. Greece, for ex­am­ple, would need the to­tal eco­log­i­cal re­sources and ser­vices of three Greeces in or­der to meet its cit­i­zens’ de­mand on na­ture for food, fiber, tim­ber, hous­ing, ur­ban in­fra­struc­ture, and car­bon se­ques­tra­tion. Athens alone de­mands 22% more from na­ture than the en­tire coun­try’s ecosys­tems can pro­vide. And, af­ter years of re­ces­sion dur­ing which pres­sure on Greece’s nat­u­ral re­sources de­clined, de­mand has be­gun to rise again, as GDP growth has shown some im­prove­ment.

To en­able last­ing eco­nomic progress, we need to break this link be­tween GDP growth and overuse of the en­vi­ron­ment. Eco­log­i­cal deficits can jeop­ar­dise en­ergy sources and threaten food se­cu­rity, with direct so­cial and eco­nomic con­se­quences. If Greece and other coun­tries are to en­sure the health and pros­per­ity of their cit­i­zens in the decades to come, they will have to find a way to pre­vent cur­rent eco­nomic ac­tiv­ity from in­creas­ing an al­ready un­sus­tain­able bur­den of en­vi­ron­men­tal debt.

For that to hap­pen, eco­log­i­cal re­sources must come to be viewed as valu­able en­dow­ments to be man­aged wisely. The Mediter­ranean re­gion’s unique, breath­tak­ing nat­u­ral cap­i­tal is one of its great­est as­sets – the rea­son why more than 200 mil­lion tourists flock to the re­gion each year, feed­ing the re­gion’s econ­omy. Overus­ing re­sources, or even fail­ing to

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