Coronavirus will change our lives in many ways, in Greece and across the globe. First of all, it will certainly make us poorer; at least in the short term. International experts estimate that Greece will experience a recession of between 3 and 4 percent. That estimate is based on the projection that Greece’s tourism industry will suffer a 50 percent drop.
Government measures will help compensate for the reduction in domestic consumption while Greece’s inclusion in the European Central Bank’s quantitative easing (QE) program will also help soften the impact. However, it will be very hard to balance out the damage to tourism and production unless the pandemic somehow magically ends in May.
Similar apocalyptic scenarios are cropping up for other countries in Europe and beyond. The crisis will test the strength of the European Union. A key question is whether Germany will finally manage to overcome the insecurities of the past and live up to the circumstances, choosing to guide Europe out of the crisis on the basis of a new Marshall Plan. It will take nothing less to save the day.
Meanwhile, we will also have to go through a necessary stage of state capitalism. Banks, major sectors and small businesses will need state funding to stay afloat and continue to operate. China is the only country that operates along those lines and that is why it is better prepared for the day after. Such a transition however will present a real challenge to the West.
Furthermore, we are also experiencing the end of American hegemony in terms of soft power. The way in which US President Donald Trump has chosen to ignore friends and allies is striking. Until a few years ago, the Americans would be expected to lead, to cooperate and to provide assistance. Now the US looks like a Third World country domestically while in terms of international relations it behaves like an egotistical superpower which only caters to its own interests. The signal was reinforced by the images of Chinese aircraft loaded with medical equipment that were sent to Italy and Greece. That would have been unthinkable a few years ago.
Everyone is moving in uncharted waters. Dealing with this new crisis will be tough politically as well as socially. Greeks already have a decade of economic misery behind them. People of course know that the problem is not exclusive to Greece; it is a global problem that was generated outside. However, such rational arguments will provide little in the way of comfort to those who will once again face the specter of unemployment just when things had been starting to improve. Dealing with the day after will require serious planning, patience and social tolerance. Because nothing will ever be the same again. People will want a political class that will be able to respond to major crises – something that Greece’s conservative administration has shown itself capable of. Also, they will expect to see a plan to repair the economic damage.
Let’s all stay well until we get through this, and we’ll get there.