Our Greek microcosm goes to bed and wakes up with the pending bailout review, looking at the comings and goings, the toing and froing of government officials as they pretend to unload their ammunition against the auditors. The government has been lying to us for the past year, announcing progress every week and proclaiming the review’s end every month. In the meantime, the economy keeps sinking in the mire of uncertainty, businesses are shutting down, the unemployed are multiplying and 64-year-olds are sent to work at public hospitals as paramedics just to get enough social security stamps to qualify for a pension.
And while Greece struggles with the inaction of our no-goodnik politicians and the ideological fixations of the left, Intel acquired, for $15 billion, an Israeli company that makes driverless cars, called Mobileye. What’s $15 billion? Just over double what the Greek state needs to stave off bankruptcy in July. That’s why Finance Minister Euclid Tsakalotos has been wearing down the soles of his shoes, coming and going from the Hilton Hotel, where the review team is staying.
The Israeli economy went through an evaluation of its own long before Greece and did so without anyone asking for it. After a terrible inflation crisis (reaching 450 percent in 1984), the Knesset decided to liberalize the market and professions, and also to drastically downsize the state. Public expenditure dropped from 60 percent of GDP in 1986 to below 40 percent in 2015. This was achieved at the same time as it increased measures to protect the most vulnerable members of society. During the period of cutting back state expenses, Israel set up the national health system, spent more money on curbing unemployment and pensioners, and invested in a guaranteed minimum wage. Public debt went from 165 percent of GDP in 1986 to 62.4 percent today.
Unfortunately, we cannot expect a $15 billion vote of confidence in the Greek economy as we experience our first left-wing government. The privileges of those who are already in the market are protected by multiple laws and even more amendments. When they are not prohibited from trying to do business in one sector, the young are punished with enormous social security contributions as soon as they try something else. Governments herald cuts in red tape to attract investments while raising even more bureaucratic barriers in the way of anyone willing to invest.
The simple truth is that Mobileye could never have existed in Greece: Some law or another would have prevented it.