OPINION

‘Socialist’ economy

The recent review of Greece’s fiscal figures, the warnings by Bank of Greece Governor Nicholas Garganas over the country’s huge public debt, the great divergence of the national economy from the more competitive European model, and other elements such as the large size of state commissions and defense spending and the system of indirect subsidies that is present in large and crucial sections of the Greek economy, all underscore that the source of current shortcomings lies in the extent of state intervention. Despite the progress made over the last few years, the Greek economy maintains strong ties with the State; it has not overcome its state-dependent character, and remains largely subservient to the political domain. A simple inquiry, even by someone inexperienced, would demonstrate that progress in vital parts of the economy and that of big corporations in the private sector depends on their preferential treatment by the State. This entanglement may be disguised, but it still involves heavy subsidies causing serious market distortions. All aspects of economic activity, from the assignment of major projects and EU-funded programs to the procurements of state telecom OTE, the subsidies to state corporations, arms procurements and the supreme boards of state-controlled banks are covered by a broad network of ties and transactions that sustain this peculiar dependence of the economy on the State. In this covert domain of political influence, glory and power come hand in hand with the oppressive dependence of politicians on economic interests. However, this system of secret subsidies distorts the workings of the market economy and puts the brakes on economic rehabilitation. It also undermines healthy competition, limits business opportunities and suppresses the activity of the most dynamic and export-oriented companies that could, under healthy conditions, open a Greek window to the world. It is clear, however, that this poor socialist blueprint of economic structure and organization has no place in the modern world because it handicaps competitiveness and the economy in general. The political sphere has to shake off these shackles and its dependence on economic interests that may sustain the benefits of power and the prosperity of a small privileged elite but also comprise the biggest threat to the economic well-being of the overwhelming majority of the Greek population.