Greek Business File, September-October 2020, No 127
by Alexandra C. Vovolini

 

 

Resilience breeds optimism

 

The new season is at hand, and everyone is on the lookout for positive signs ahead; but to be honest with oneself, no easy optimism is in sight. In several fronts and on multiple levels, the best one can hope is for the efforts that are expended to bear fruit – for efforts will be needed

 

For one, the Greek economy is in a recession and a significant one at that. Of course, the current woes, caused by the Covid-19 pandemic that is still underway, are by no means limited to Greece – nor even is the reces-sion more pronounced here. The pan-demic and its consequences has struck all around the world; many EU coun-tries, as well as the UK and the US, have been going even deeper in recession. The problem with the Greek economy is that it had just started to creep out of a dark tunnel –at great social cost– when the pandemic struck. Not even the traditionally optimistic Greek sum- mer, or the help that August brings due to the tourist waves in every corner of the country to offset financial de- mands on many businesses and more households, have they succeeded to ameliorate prospects this time around. Indeed, the fact that a second wave of the Covid-19 pandemic has appeared (or is it a resurgence of the first?) brings back one issue that for quite some time we had left aside: relying on the servic-es sector –mainly tourism and leisure, as well as shipping/transports– can be of great benefit for an economy; but when such activities get close to being some sort of monoculture, then shocks like the one we are going through can prove traumatic.

As Greece, along with all EU countries, starts the uphill struggle of its econo-my, assisted by the funding promised to that effect by the Next Generation EU initiative put on foot by the July Summit of European leaders, so as to provide a Europe-wide answer to the economic shock of the pandemic, the country, its leaders, and its people need to realize that a radical shift in its pro-duction model is needed. A multi-facet-ed Report, with several policy sugges-tions, was put forward by the Pissarides Committee enlisting several leading Greek economists under LSE Professor and Nobel laureate Chris Pissarides. What is now needed is for policymakers to realize that essential suggestions of the Report –such as achieving pension reform, targeting investments that will lead to production of tradables, and the reduction of inequalities– should be addressed in earnest. However, for any legislated structural reforms to suc-ceed, “implementation, implementa-tion, implementation” is essential, as Christine Lagarde used to say in her IMF days.

If reform proves that major a chal-lenge for Greece, a steeper climb awaits the country and its people in the fight against the new wave of Covid-19 that has already appeared in late summer.

Meanwhile, even greater may prove the weight of the Greek-Turkish con- frontation that is simmering and threat- ens to end in a flare-up, notwithstand- ing EU’s and US’s efforts to quench it before it turns into overall regional destabilization.

On another note, the current issue of Business File will be coming out when our mother publication –Greek-lan-guage monthly Oikonomiki Epitheori-si– will celebrate its 1000th issue. Busi-ness File is also due to complete its 31st year of publication, having started in December 1999 as a series of Business Surveys (visit our site for more information and back copies).

Both facts give us a sense of perspec-tive and strike a note of optimism, to continue publishing information and analysis about our beautiful country and its people, who have such a special mentality and resilience.