Wanted: Economic reform

The announcement by Schiesser Pallas of its intention to close its Athens factory, the takeover of cigarette maker Papastratos by the US tobacco giant Philip Morris, and Thursday’s warnings by the Federation of Greek Industries (SEV) of a possible surge in unemployment have catapulted the short-term structural problem of the local economy onto center stage – what is more, at a time of political turmoil. It is common knowledge that despite the progress made over the previous years (mostly based on the efforts to achieve nominal convergence with the EU and on the inflow of EU structural funds), the Greek economy has yet to make the necessary structural changes to deal with the new wave of globalization. Our economy and society have seen a surge in demand and consumption that by far exceed Greece’s production. Leaving aside that part of the funds spent on (overpriced) public works, the rest has been used to sponsor this consumption-driven model, now showing its weakness. Even worse, it seems that EU funds bound for education and training were squandered through scams purporting to teach computer skills to Gypsies and foreign languages to taxi drivers and so on. Funds aimed at softening the impact of globalization, which engulfed the 500 workers at Palco, were instead used to build luxurious mansions. If the stock market bubble was the outcome of a speculation gamble that was in part understandable, the squandering of vocational training funds constitutes a crime against society. As a result, the Greek economy is now totally exposed to the storms caused by the high mobility of business and capital. Our economy can no longer survive on outside funds. EU sources are drying up and the current consumption-based model is about to collapse. The State must restructure Greece’s production model or condemn the country to economic misery.