Greece is at the epicenter of the earthquake shaking the global economy. The developed countries ? the old, mature, economies ? are sinking in debt just as the developing ones have reached the point where they contribute almost half of the world’s domestic product. In the blissful irresponsibility of the past few decades, the Greeks rushed to become the first nation to be served a bill that far exceeds its ability to pay. With our mistakes, we drew upon ourselves all the thunder and lightning of the global storm. The fact that we are not the only nation that will suffer is no consolation; but if a great part of the planet is similarly affected, this will make our recovery even more difficult.
The crisis that we face today ? in Greece but also at the global level ? is not just a debt crisis, but the result of a growing imbalance between labor and income across the planet and within countries. In Greece we see that our country cannot produce enough, nor offer sufficient services, that will bring in the revenues needed for its citizens to maintain a dignified living standard. Even if our debt crisis were solved today, our demographic problem is so serious that we cannot hope our economy will survive if we do not become part of a larger economic entity, with new principles. Whatever we do on our own, soon there will not be enough Greeks working to cover the needs of our pensioners.
In Greece, as elsewhere, new production methods, new technologies, and the global market of products and services means that fewer and fewer people in the mature economies enjoy the fruit of wealth, the middle class is shrinking and unemployment is growing (unless this is offset by greater public debt). The old economic models that were based on the need to limit unemployment are not working as they should. As this challenge is not being met, the very rich are getting even richer while the rest are in danger of a radical drop in their standard of living. Already, 2011 saw the start of movements by citizens who are afraid of being pushed to society’s margins.
We Greeks were the first who found ourselves in the furnace because for many years we did nothing to avert the coming catastrophe. That is why we were the first who had to call on our partners for help; that is why we face the challenge of having to cover our needs with our own funds. On the one hand we are unlucky because of the great deprivation and insecurity that we feel, on the other, we have the great benefit of being supported by our partners as we try to bring order to our economy at a time when everyone is running out of money. It is striking that Greece’s government deficit was cut from 36.6 billion in 2009 to 24.5 billion in 2010, and then 19.4 billion in 2011, putting us within reach of the goal of a primary surplus this year. With the upcoming debt reduction, the economy’s burden will be lighter and we will be left with the challenge of finding ways to create wealth.
We may be hurting, we may be frightened ? and we may get to hurt a lot more ? but our country is not out of control. With careful steps, by imposing the law without exception, and with the will to succeed, we could emerge victors from the crisis. What we need is leaders who will inspire, who will set a course based on our abilities, not on fairytales or taboos.
Beyond our borders, though, major economies face the problem of debt. Greece’s greatest problem is the general government debt and not so much that of households, companies and banks. Our total debt is equal to 267 percent of GDP. According to a recent McKinsey Global Institute report, among the mature economies, Japan’s total debt is at 512 percent of GDP, Britain’s is 507 percent, while those of the United States are at 279 percent and Germany’s 278 percent. The big countries have the good fortune that no one demands they make the great, sudden adjustment that Greece has had to make. Until the time they have to change…
In the worsening global situation, as new solutions are tested, the only thing that the Greeks must achieve is to survive. We have to avoid bankruptcy. We have to stay standing to take part in the future.