Growth is no manna from heaven - The Best from Greece
Growth is the buzzword on everyone’s lips these days. To be sure, putting Greece back on a path of growth is extremely vital. But it would be a huge mistake to cultivate the impression that growth will fall like manna from heaven in the shape of a new Marshall Plan, a gigantic EU-backed funding program, or some other magic formula. I’m sorry to upset the Paul Krugmans of this country who seem to have confused the American economy with Greece’s quasi-soviet counterpart, but things are a bit more complicated than that.
One only has to talk to a few serious foreign investors to understand that only we ourselves can generate growth. First of all, no foreign investor will ever invest in Greece until he sees his Greek counterparts putting their money in first. It goes without saying. I mean, what Greek would ever invest in China if no Chinese were willing to do so first, or, worse, if he listened to local investors complain that every investment results in some kind of complication?
Foreign investors can see Greece’s potential: the highly educated labor force, the geographic location, the sunny weather. But, naturally, they do have a few simple demands, such as:
* Long-term political stability and partisan consensus on fundamental issues
* A clear tax regime that leaves no room for misunderstandings or blackmail (in other words, no gray areas, just straightforward rules about what is legal and what is not)
* Protection against local business barons or oligarchs who have an interest in keeping some markets closed, and who will do anything to keep them so
* Equality before the law
* Simplification of permission/authorization procedures (although it must be said that there has been some improvement in this area)
* Finally, they do not want to feel like targets in an undeclared war waged by the state, politicians and media against entrepreneurship, profit and similar ideas.
Is this too much to ask? Perhaps, because these people don’t see -- like we don’t see -- any of the Greek politicians telling the truth about the situation: It’s over, we can no longer function as a quasi-soviet economy and we cannot become the Cuba of the continent. We are a paradoxical society: On one hand we despise investment and on the other we crave it because it generates jobs and money.
We need to change so that we can welcome investments and spur growth. An experienced German economist was saying the other day what Greeks need to do to come out of the crisis: “You should not expect some magical solution from Berlin or anywhere else. It will take you five to six years to reform your economy, and only after your income has dropped by a further 10-12 percent. During those years, there will be entrepreneurs to focus on tourism, agriculture and exports. A person who once worked at a store selling Italian clothes for 1,200 euros will have to get a job in a farming business for less. All this will be hard, slow and painful, but you will eventually find your way, like we and other people have done in the past.”
All that is neither pleasant nor comforting, but growth will only come when the deadlocks push businesspeople and employees into different activities -- with unfortunately different standards and expectations.
Can Greek society do this? The more false hopes are stirred up, the greater people’s frustration and anger is bound to be, thereby obstructing the path to recovery. But we have to demand that our politicians try harder and finally find the courage to break some eggs instead of looking toward Berlin or anywhere else for a solution.
Unless we as a society embrace entrepreneurship, risk and productivity, we will only sink deeper into stagnation waiting for the new Marshall Plan.
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