Who is responsible for our poverty?

Written by Kostas Stupas

1) Who is responsible for our poverty?

Many were surprised that Greece was ranked as the poorest country in the European Union outside of Bulgaria. This is not a surprise.

We have argued for many years in this column that Greece was and remains the last Soviet regime in the region and in the West as a whole.

The country's characteristics of “Sovietization” relate to the strong state, the closed economy, the lack of competition, the oligarchy (which has functions in the state, the media and the collectivities), and the unions involved in the management of the public and the wider public. etc.

Public employee indifference to police officers in A/T Ag. Anargyron, seeking protection from the unfortunate woman who was murdered a few days ago outside the police station, is typical of this type of economy without incentives.

The country's collapse began in the 1980s when the number of employees in the public sector increased fivefold. Within a few years, the debt jumped from 20% to 100% of GDP, and the productive fabric of Greece completely disintegrated.

Landing

Of course, it is true that in recent years there has been an improvement in the picture of the Greek economy.

From 2019 onwards, Greece is growing faster than the EU average. Exports have doubled in the past decade, and a few days ago The Economist wrote that the Economist Intelligence Unit's business environment index improved 28 places from 62nd to 34th among 82 countries.

Recent economic data confirms the positive assessment published by The Economist magazine.

In 2023, Greece showed GDP growth of 2% when the average was 0.5%. This means that after many years, the Greek economy is approaching the European average. Of course, we are still far from the level we reached before the 2010 bankruptcy.

Exports in 2023 did not reach the staggering historical record of 53.7 billion euros for 2022, but 49.4 billion euros, taking into account the decline in price escalation, is still a good performance. Only a few countries have been able to nearly double their exports in a decade. Of course we are starting from a low base, and if we can do that in the next decade, we will be able to be more optimistic.

But this is all about a first superficial reading of developments.

The Achilles' heel of the astonishing improvement in exports is the simultaneous astonishing increase in imports, which in 2023 reached 81.8 billion versus 93.3 billion in 2022 and 46.7 billion in 2013 in the middle of the crisis. Despite strong revenues from tourism and transportation in 2023, the current account deficit reached 14.1 billion compared to 20.1 billion in 2022 and 1.7 billion in 2019.

This deficit proves that the Greek economy, despite increasing exports, is not yet able to replace imports with competitive products.

In 2023, gross fixed capital formation improved impressively to EUR 37 billion compared to e.g. €21 billion in 2014. However, it is far from €60 billion in 2008. With €37 billion, we marginally exceed €30 billion in the year when consumption is taken into account. In order to reach a respectable position of power in the region, we must be able to exceed $100 billion annually. It seems impossible.

So there is no doubt that the direction in which the economy is moving after 2019 is the right direction. This is confirmed by all festive reports and publications.

The question is, is the speed appropriate?

For example about 30 years ago, Greece had two-thirds of Turkey's GDP and had a larger GDP than all the Balkan countries. Today it has less than a quarter of Turkey's GDP and less than 50% of the Balkan countries' GDP. The country with the largest GDP in the region is now Romania.

Post-bankruptcy Greece in 2010 has successfully avoided the worst of a default and exit from the euro, which would have jeopardized what we have achieved since 1821. Anyone can now imagine that a battered and shattered Greece would be another opportunity for Turkey like that Located in Syria and Libya.

But it is unfortunate that the reforms that would have ensured dynamic growth several times the current growth, and which would have ensured the strength and continuity of the country, were not implemented without guarantees and subsidies from allies and partners.

Greece has shown amazing improvement in the past five to 10 years, but it has shown tremendous lag in the development of its neighbors and competitors in the past 30 to 40 years.

We have written many times that the high priest of Greek poverty and bankruptcy is Andreas Papandreou in the long run, because the deviance began in the 1980s. In the short term, the Karamanlis administration dealt the final blow between 2004 and 2009.

And now, to have any hope of salvation, we must become something between Ireland and Israel. However, I see neither the will nor the human resources, so the hopes are that the EU will wake up one day. Go ahead, pull us along.

2) I am writing to you about 3 separate issues

Good morning, Mr. Stupa

1. I was recently talking with a young man of Albanian origin who came to Greece when he was 10 years old, completed his studies in Greece, was fully assimilated, but Greek citizenship was not granted to him by the Greek state. Aside from the fact that this is unfair, and given the demographic problem, I honestly do not understand why the Greek state behaves this way. The young man now lives abroad with his Albanian papers, although he feels that he is Greek. I think it's a shame.

2. I have posted many messages from Greeks living abroad comparing Greece and where they live. I also lived abroad for 30 years and of course I know everything they write. But I don't see how all this helps. It is not possible to compare Greece, the countries that were lucky enough to enjoy the Renaissance and Enlightenment, with Greece, which was not. Let us compare the United Kingdom which, at the time Greece was an empire, was an Ottoman province. Based on our history, I don't think we've done a very bad job. Moreover, comparisons are constantly made with the world's richest countries, which are a small minority. If you travel a little further, you will see that Greece belongs to the countries with the highest standard of living.

Self-flagellation is meaningless. What makes sense if we love our country are lists of suggestions for improvement, not lists of comparison and self-flagellation.

But mainly suggestions on what each of us can do individually to help our country instead of constantly making fun of it. In the end, “It is not what your country has done for you that matters, but what you have done for it.”

3. Mr. Stopa, you are a great analyst and journalist. I recently wrote a very useful book. I dare to point out that a book about Andreas Papandreou is missing in which all the evils he committed in Greece would be documented with evidence. Many of our compatriots even consider him a role model. I believe that a book like this will contribute to our adulthood.

M.D.

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