Are we re­peat­ing the same cy­cle?

Kathimerini English - - Front Page - BY PASCHOS MANDRAVELIS

There are many ways to eval­u­ate a po­lit­i­cal party’s pro­pos­als for ex­tract­ing their coun­try from an eco­nomic cri­sis such as the one in Greece. The safest is to as­sess what each pro­posal will cost, one by one and step by step. The least re­fined way to do it is to see who will be most af­fected by the pro­pos­als and how, so­cial group by so­cial group. And one rule that must never be for­got­ten is that there must be some­thing wrong with any pro­posal that ap­pears to please ev­ery­body. Such pro­pos­als be­long in the past, to a time when there was money to be made in the mar­ket and loans were read­illy avail­able to keep the state in­tact and afloat, and the vot­ers happy. Un­for­tu­nately, Greece to­day is by no means in such a sit­u­a­tion. Loans have dried up and the fund­ing poli­cies that we so look for­ward to in or­der to boost growth sim­ply do not ex­ist any more. More­over, the 1980s showed us that in an open econ­omy with­out a pro­duc­tion base, throw­ing money you don’t have into the mar­ket brings gains to other coun­tries and leaves you look­ing at mount­ing debts. And this was the case even though the Greek econ­omy at the time was much more re­stricted that it is to­day. The con­cept of “re­boot­ing the econ­omy,” as op­po­si­tion New Democ­racy leader An­to­nis Sa­ma­ras promised at his Zappeio 2 pre­sen­ta­tion last week, not only con­tains too much of the past, but also has no fu­ture at all. Even if Greece had 100 bil­lion eu­ros to pour into the mar­ket im­me­di­ately, the econ­omy would make a few laps for as long as the money con­tin­ued to cir­cu­late on the do­mes­tic mar­ket and would then splut­ter to a halt like a faulty en­gine. That money would grad­u­ally make its way out­side Greece to pay for im­ports of goods needed for ex­changes and for con­sump­tion. And then, once the cash flow dried up again, we would find our­selves in an even deeper re­ces­sion with even big­ger debts. Af­ter all, isn’t this what Greece has been do­ing decade af­ter decade, and the rea­son why it is where it is? What nei­ther the gov­ern­ment nor the op­po­si­tion is propos­ing is a cre­ative shock to the econ­omy. Open­ing up closed pro­fes­sions, for ex­am­ple, could bring mul­ti­ple ben­e­fits. First of all, the mar­ket would see an in­flow of money from small in­vest­ments, which to­day are pro­hib­ited by law. A young phar­ma­cist, for ex­am­ple, would be able to in­vest in build­ing a store and hir­ing staff, gen­er­at­ing some mar­ket move­ment. Yet, on the is­sue of closed pro­fes­sions, the gov­ern­ment keeps mud­dy­ing the waters and Sa­ma­ras said not a word. He did not make a sin­gle men­tion of the is­sue any­where in his 7,000 word speech. And it’s not as though this is an is­sue that is of no concern to the op­po­si­tion. Sa­ma­ras also failed to elab­o­rate on the big­gest mat­ter of gov­ern­ment busi­ness, which is cut­backs in spend­ing. Sure, ev­ery­one talks about how curb­ing waste and us­ing dig­i­tal me­dia to bet­ter ef­fect are a pri­or­ity, but, mean­while there are thou­sands of or­ga­ni­za­tions that serve no real pur­pose at all other than suck­ing up state fund­ing that should be closed down at once. The fact is that there is no easy way out of the cri­sis and it will cer­tainly not be achieved by half-baked mea­sures. A re­struc­ture of the Greek econ­omy can­not be achieved through bankrolling the ex­ist­ing state model, how­ever warm the ap­plause of the in­sti­tu­tional cham­pi­ons of a form of cap­i­tal­ism that’s di­vorced from re­al­ity. Get­ting back on the path of growth will take a lot of work and pain, but this is some­thing no one seems pre­pared to say.

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