Construction firm profits

Economic developments over the past few years have shown that Greece’s unusual system – a mixture of statist and private economy that is based less on firm rules and principles than on power relations – is responsible for an extensive redistribution of wealth that has favored a small minority. From the late 1980s until the mid-1990s, the main beneficiaries were state contractors that rode on the revival of the communications industry. This was a golden era for Socrates Kokkalis and his satellites. It was followed by a brief period of self-restraint, from 1994 to 1998, which provided the opportunity for the major stock market bubble that caused the quickest and most widespread wealth redistribution in modern Greek history. Ultimately it shook the country’s economic foundations and made things difficult for an untold number of businesses and households. In today’s lean times, a new process of wealth reallocation is under way, spearheaded by big construction projects. It is clear for all to see that construction firms are the only ones absorbing huge funds in the current phase. A massive renewal and restructuring of a country’s infrastructure is not something that happens every day. This is only the second such time in the last 50 years, and allows for one of the highest profit margins in Europe. Our system has proved unable or unwilling to monitor the cost of the projects and to shape a context of healthy competition with transparent bidding procedures. It also failed to prevent the flow of money into the pockets of a few privileged construction firms. The State should at least find a way to channel some money back to the people. Now roads have been destroyed and everything is crumbling, part of the revenue must go for reconstruction. This would be a minimal intervention by a sinful state; it could absolve itself in the eyes of the many and the poor.