In personal crises, people often lose the ability to think, hampering their chances of overcoming the challenges before them. Something similar happens to economies. When crisis hits, countries suffer a brain drain of many of their most qualified workers. This is true of Greece, where 20,000 homegrown research professionals emigrated during the five years to 2014, the worst of the country’s financial crisis.
We want them to come back, and we want young new scientists to see their future at home, where they can contribute to the innovation that will drive growth in the decades to come. For this reason the Greek government partnered with the European Investment Bank, contributing 60 million euros and 180 million euros respectively, to the Hellenic Foundation for Research and Innovation. The foundation issues its first call for research proposals this month and will fund the work of talented young Greek scientists over the next three years.
This project is a manifestation of a change in emphasis in the Greek economy that both of us support and are working concretely toward. To build a strong future for Greece, we must promote the innovation that powers truly productive economies today into the increasingly complex digital future of industry. A culture of innovation – backed by good financial regulation and investment – creates opportunities for entrepreneurs whose ideas have high growth potential. It also supports the aspirations of small-business owners. In collaboration with the Greek government and with a view to nurturing such innovation culture, the European Investment Bank has established this year a dedicated Investment Team for Greece, and has reached an exposure to the country equal to 10 percent of the country’s gross domestic product.
Since the crisis started, the main focus has been on Greece’s public finances. The Greek government’s actions have been effective in this realm, but it is now necessary to also jointly target the private and public sectors with a view to boosting overall investment, thereby regaining the ground lost since 2009.
The European Union’s Investment Plan for Europe plays an important role here, because it is specifically geared toward investment in innovation, with particular focus on small and medium-sized enterprises. Small businesses benefit from the Investment Plan for Europe too, since thousands of Greek companies are being financed in concert with local banks, thus contributing to the versatile development model that the government is eager to promote.
The rethinking of Greece’s future must take a geopolitical dimension too. Prime Minister Alexis Tsipras spoke this month of the country as a beacon of democracy and stability in an increasingly troubled region. In that context, Greece aims to position itself as an energy hub. The European Investment Bank is appraising a potential investment in the Greek portion of an international pipeline, which could add 8,000 jobs in the north of the country.
So let us look forward to a new deal in Greece. As the government continues its reform drive to confront tax evasion and corruption, it intends to use much of the proceeds to fight the social problems that have afflicted the country since the start of the recession – providing subsidized food for schoolchildren in poor neighborhoods, for example. Combine this social dimension with a culture of innovation, and we are confident that we can move into a time of prosperity and cohesion for Greece.
* Euclid Tsakalotos is Greece’s minister of finance. Werner Hoyer is president of the European Investment Bank.