Uncertainty is the biggest side effect of the 9-year old Greek crisis. Uncertainty for the stability and the future, both in market as well as in personal terms.
This situation is hindering our economy to achieve growth of some significance and overcome the dead ends of the crisis.
Alongside the repeated “Program Reviews” (we are now on the third) the political polarization and resistance to reforms, Greece will again be the first victim if markets decide that the rally has gone too far, and it is time to take profits.
A reconstruction plan is required but it has to be a national one, embraced by all. Let’s start by admitting that the biggest challenge is by far the very high debt to GDP ratio. A debt that is not sustainable, a claim also supported by the IMF, that creates a hostile environment for investments.
In order to restore confidence, the plan should focus on enhancing economic activity by introducing some fundamental reforms, such as the establishment of a low and stable taxation environment, much lower surpluses than the unbelievable and unrealistic 3.5% p.a., a drastically reduced and much more efficient public sector, swift privatizations and a real fast track permitting system for investments of €100 mn or more and other such interventions that could greatly contribute to the increase of Greece’s GDP. We should also agree with our creditors that whenever we implement the reforms, this could reduce the targets of our primary surplus.
But to make the solution complete, the plan should also address the issue of the national debt’s reduction. A proposed solution could be one that links the debt’s reduction in the form of a haircut or a reprofiling. Thus, we could have immediate results with the adjustment of the debt’s reduction in small, quarterly tranches after concrete, provable reforms have been implemented. This combination of measures that increase the GDP and at the same time reduce the debt could lead to tangible outcomes in record time, giving a great amount of hope to the Greek people, and a fair chance for a real recovery.
The debate for a new institutional arrangement within EU is not a new one, but now more than ever it is imperative to actually proceed and decide on a new version that would help promote deeper integration in the economic sector, that would replace old and by far outdated treaties that served different needs. A constitution that would serve as a shield to populism and growing politics that undermine national economies. A new treaty that would take into consideration the new economic forces, such as China, but with respect to every Member State.
I have spoken in economic terms, as a business person, as most of you would have expected.
Allow me now to talk as a citizen; as a concerned but also as a proud European Greek citizen. Our potentials lie within our unity. Our strength lies within a national conciliation, without political angulations. And I believe that we can manage, if only we embrace our own strategic plan, for our future and for the generations to come.
*Chairman and CEO of Mytilineos SA