Economy needs to turn attention outside country’s borders

Greece could be transformed into the playground of Europe and the broader region “and even something that could be compared to Florida or Silicon Valley,” according to the president of the Hellenic Bank Association’s Scientific Council, Michalis Masourakis.

Presenting a study titled “Competitiveness for Growth – Policy Proposals” in Athens on Wednesday, Masourakis argued in favor of the transformation of the Greek economy into one oriented toward internationally tradable goods and services.

Hellenic Bank Association President Giorgos Zannias said the transformation requires time, but noted that after a period of stability in the economy, “its growth potential can be released – and it is huge” – and would be capable of creating the conditions to improve “the welfare of the people.”

The group study includes specific policy proposals by more than 50 authors, aimed at releasing the economy’s major development potential and improving public administration.

Despite the optimistic messages about the economy’s transformation through the fiscal adjustment and structural reform program, intended to strengthen competition and lead to internal devaluation, the risk of a prolonged period of massive unemployment with social clashes and tensions is still possible, said Masourakis, who is also director of financial research at Alpha Bank. What could contain the adjustment cost would be the creation of a favorable development model with privatizations, investment in infrastructure and the attraction of foreign investors.

The country’s growth potential will come from a swing toward sectors of internationally tradable goods, which thanks to their exposure to international competition have incorporated developments in technology. Combined with the restoration of competitiveness, which has already been achieved, such a swing would allow for an increase in productivity to accelerate from 2014 onward thanks to reforms realized in the labor market and the public sector.

Greece, one of the study’s articles notes, does not need to compete with other countries in terms of low labor costs; the only thing needed is for salaries to be paid from revenues from the sale of competitive products and not from the constant increase in the country’s borrowing from abroad.