I am concerned about the return to normality and the possibility of a fresh flare-up of the coronavirus epidemic because we aren’t behaving as responsibly as we did in the early days after Covid-19 first arrived in Greece. I am more concerned, however, about the normality we’re returning to.
The last time we returned to normality – from the 10-year debt crisis – the situation we came back to was more or less identical to that which led to the crisis in the first place. After shedding a quarter of our gross domestic product, exiling some of our finest minds and destroying thousands of lives, we went back to the same growth model we had before. Despite the high cost, we missed the opportunity presented by the crisis.
This time around, the return to normal will be accompanied by a deep recession. Regardless of the economic model we chose to trust, all agree that the Greek recession will be deeper than in other countries, for two reasons: the extremely high reliance on tourism and the fact that small and medium-sized businesses and self-employed professionals make up a large share of economic activity.
According to the Organization for Economic Cooperation and Development (OECD), the sectors that are being hit the hardest are transport manufacturing, construction, wholesale and retail trade, hotels and restaurants, real estate activities and professional and other personal services. If you exclude the first sector (Greece has no Airbus or Boeing), the remaining ones are the pillars of the Greek economy.
Moreover, Greek normality also includes a deeply wounded banking system trapped in a futile effort to deal with nonperforming loans and incapable of bankrolling a rebound.
As in the last crisis, we have all the hallmarks of a wasted opportunity with this one too.
Within the next few weeks, the Greek government will have to make some difficult decisions about how to utilize its shrinking fiscal leeway and whatever resources we receive from the European institutions. Many are already clamoring for a slice of the pie. I recently found out, for example, that certain hoteliers are pressuring the government for measures allowing them to settle old debts – including some from the 1990s. Businesses big and small are seeking horizontal subsidies for lost revenues from the state budget, without any criteria.
There is not a lot of money going around and half of what there is has been borrowed. This is why the choices that need to be made are tough. Handing out money to everyone, as the government did in the first stage of the pandemic, is neither hard nor a choice.
A choice is demanding that businesses which have been sitting pretty for years start shelling out and sharing the cost with taxpayers. A choice is giving support to viable businesses and not those using the crisis as an alibi and jobs as a threat to buy – with public money – a few more months of life. A choice is bolstering sectors that produce high-added value products and generate well-paid jobs.
A choice is imposing terms cutting off businesses that do not fulfill social responsibility criteria, that systematically violate labor laws and whose survival relies on the sum of debt-settlement schemes for bank arrears, unpaid taxes and overdue social security contributions.
A choice is supporting businesses whose plans include steps for sustainable growth, that seek to be more profitable and extrovert, that give their employees better salaries, that are, in short, useful not just to their shareholders, but to the economy as a whole. A choice is taking immediate decisions so that the economy finally has a banking system it can rely on.
If going back to normal means going back to business as usual, we will just pay an even heavier toll for another crisis as we wait for the next one to strike.