By Seraphim Constantinidis

Over the last 10 years, the development of the Greek economy has mainly relied on public works and credit expansion to private consumers, that is, mortgage and consumer loans. This model has obviously reached its limits, leaving behind a large fiscal deficit without increasing legal employment.

In the decade before, development was based on the rise in agricultural income, thanks to European Community funds, as well as to increased hirings in the public sector. Yet this model didn't bring sustainable development either.

It may be high time we broke free of the «politically correct» approach to development, which usually disregards tough reality. It could be «back to basics» time. The main reason for an enterprise's existence is to produce services and products with higher value than the cost needed to produce them.

Much as that sounds like a cliche, there are thousands of companies and initiatives in which that principle does not apply, because they are either small enterprises, cooperatives or state companies. Across a broad section of the Greek economy, the basic principle for companies' existence is ignored. They serve other purposes, such as offering social work, maintaining employment or securing some standard of living. These may be pleasant and even admirable goals, but are different to those of an enterprise. Therefore, each time development is mentioned, priority is given to either strengthening small and medium-sized enterprises or support to the provinces or an increase in employment. In reality, though, the actual lack is in great investments. It is unprecedented for a country that maintained high gross domestic product growth rates not to attract large investments. Even Ireland's example, which everyone (theoretically) admires, began by attracting great investments from the world's biggest companies, realizing that a large investment in some region would allow the development of many small and medium-sized enterprises associated with that. Catalysts are required, though, to offer the main push, and this role can only be assumed by investment initiatives that are significant in size. Nevertheless, this necessity does not sound pleasant and is even taken as occasionally suspicious.

This deficit in big investment schemes is usually hoped to be covered in other ways - by supporting smaller investment plans, which are not profitable, however, and do not offer sustainable development; and through public works that even should they provoke local tension, are generally accepted. They may not stick to the basic cost-value principle, but this divergence is not immediately visible. And when it is noticed years later, no one will remember who was responsible.