Harsh statistics

There can be no doubt Costas Karamanlis’s government inherited a very difficult situation. But it is equally clear that it has, so far, failed to turn it around. The publication of macroeconomic data for the first five months of 2005 simply consolidated what was already perfectly clear: The Greek economy is continuing its downward course. Greece’s current account balance – the mirror of any country’s economy – is an eye-opener. The state deficit has increased by 38 percent compared to the first five months of 2004, skyrocketing to 6 billion euros from 4.36 billion euros. The increase in oil prices also further burdened the state balance, but only by 700 million euros. The real source of the problem was, and remains, the large increase in the trade deficit. During the first five months of last year, exports reached 4.8 billion euros and imports stood at 14.9 billion euros. This year, the figures stand at 5.4 billion euros and 16.6 billion euros respectively. This means that the trade deficit increased to 11.2 billions euros from 10.1 billion. Revenue from the tourism sector grew slightly to 1.9 billion euros from 1.8 billion, but the main injection of funds came from the shipping industry, which this year produced 5.8 billion euros as compared to 5.4 billion last year. The conclusions basically draw themselves. The Greek economy cannot continue on its current course. There is a need for drastic intervention with a key focus on boosting competitiveness, seeking and harnessing alternative forms of energy and – most importantly – diversifying the chief consumer model. Once and for all, our country must highlight the sectors in which it has a longstanding tradition and competitive edge and concentrate its efforts in these directions. But, as always, good intentions are not enough. Greece needs new prospects for growth. If it is to turn around the currently unfavorable situation and set the economy on an upward course, it must establish stable regulations, eliminate bureaucratic obstacles wherever possible, implement further structural reforms and make several well-considered interventions, by region and by sector. This is the only way to ensure utilizing existing capabilities and unshackling more productive forces. It would be utopian to expect immediate solutions to chronic problems. However, taking effective action is a very realistic approach. The public has no need for whitewashing and exaggeration. It needs clear statements honestly describing the extent and intensity of the country’s economic problem and guaranteeing a solution. This is the only way to create a climate of self-confidence among citizens.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.