A plan and a new social contract
There is nothing transitory about the challenges we’re facing – if anything, they’re mounting – and the fixated advocates of market self-regulation led their governments to take delayed and unproductive decisions in response. Greece is no exception, of course.
Eurozone inflation will persist at the current high levels for some months to come and economic growth will be sluggish, European Central Bank President Christine Lagarde said recently. The International Monetary Fund will revise its outlook downward for 143 countries, representing 86% of the world’s gross domestic product, added its managing director, Kristalina Georgieva, on the same day.
Some of the effects of the war in Ukraine are already apparent, but not all of them and not in their entirety. Much will depend on how long it lasts, with some estimates being that it still has a long way to go and that it will send shock waves that will be felt across the world.
There are certain factors that set Greece apart from other countries, having to deal with the effects of the war just after coming out of a decade-long crisis during which it shed 25% of its GDP and saw an entire generation destroyed. It is indeed in a fragile state. The inequality gap keeps widening, its social justice score is extremely low (putting it near the bottom of the European scale, even behind some Balkan states) and social mobility is slowing down. The state apparatus remains sluggish and the economy is split between a handful of powerful, modern businesses on the one hand, and an archipelago of small and tiny ones on the other, many of which are unsustainable, surviving only at the expense of salaried labor, social security funds and public revenues. And this is not to mention tight fiscal parameters caused by two years of “relaxed” management, massive debt and a “junk” status credit rating. No, we are not at our best.
Few lessons appear to have been learned from our recent ordeals, as though Greece was not put through the wringer by three memorandums in 10 years
This is also true of the prevailing mentality: Few lessons appear to have been learned from our recent ordeals, as though Greece was not put through the wringer by three memorandums in 10 years. And political opportunism, populism in all its various and enduring forms, are finding fertile ground in a frustrated society, as desperation and despair quickly make their way up through society: One in four Greeks are now below or close to the poverty line, but many more feel that the “system” is not listening to them, not interested in them and has abandoned them to their fate. The “system” is something alien and hostile. And since my enemy’s enemy is my friend, even if that is Russian President Vladimir Putin, 34% of Greeks have some sympathy for Russia in its invasion of Ukraine. No, we are not doing well at all. And the tinder pile is growing bigger.
The least we could do is honestly admit that it is unlikely we’ll cross the river of this new crisis without getting wet; put together a list of alternatives for redistributing the burden of rising costs; and make sure that vulnerable households have everything they need to survive, even at the expense of what fiscal space is left. But even that is not enough.
The present challenges should not be allowed to overshadow the fact that there is no going back to the normal we once knew. The climate crisis, European prevarication, its prioritization of defense over social spending, the clash between authoritarianism and democracy and the looming slowdown of globalization, the enhanced role of the state and new demands concerning its quality, are factors that will challenge our values and priorities, and take us into uncharted territory.
An ambitious and far-reaching plan for the country would be a useful compass to help guide us. It could also form the basis of a new social contract – and that would certainly raise the stakes for the next general election.
