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Posted on: June 10th, 2016 No Comments

Mumbling our way out of the Greek crisis

If a financial auditor was asked to explain the Greek crisis, they will probably say that everything is about revenues and expenses and the ability to keep a balance at the end of the fiscal year. An accounting professor would say the same thing, probably citing an Accounting 101 textbook as further reading.

Both they would agree that when a system relies for too long on extensive borrowing to make a living, at some point comes the time when imbalances, deficits as well as ‘extra cash needs’ (e.g. Olympics 2004, repetitive elections, etc.) cause the system to suffocate; things are worse when the system is already severely structurally flawed.

The phenomenon is not new in Greece. Greeks, due to a peculiar sense of individualism, are used to live in the sidelines of legality, sustain distortions and serve each other’s petty interests; suddenly, when the shit hits the fan, they resort to law books to assess wrongdoings of those who were found standing when the music stopped or had failed to secure sound political backup.

In the case of 2013 Greece, what’s done is done. The blame game’s only significance is when citizens approach the polls. What is really needed – and perhaps what citizens need to rely on to move forward – is strong political will to codify the crisis rhetoric in terms of the future; it requires thinking what is necessary to exit the vicious cycle of indecisiveness and misery, maintaining, at the same time, the decency of the Greek people.

To start looking ahead (and most importantly to start exploring the advantages of the country) needs to first to put things in order. Some key areas –that, perhaps, would satisfy most mainstream political trends- could be the following:

1) Protection of national sovereignty (land and sea borders, ownership of natural resources).

2) Fiscal efficiency – we should stop consuming more than what we produce.

3) Production of new wealth in a socially responsible way.

4) Preservation and development of social capital to secure sustainability of all the above.

These four simple concepts (homeland, fiscal balance, sustainability, people) require a new philosophy towards life as well as long-term planning and continuous innovation. Before those, however, some positive shocks could come in handy.

A couple of months ago, Prime Minister Antonis Samaras shyly mumbled a figure: 15% corporate flat tax for all entrepreneurial activity. Well, it is not like inventing the wheel, since many countries with fewer problems have introduced it as an incentive to attract FDIs, but it could definitely be a positive sign for companies already operating in the country. Well, for new ones to arrive, Samaras would have to voice more meaningful points such as: simplification of the process for the creation of new companies; online company register; cutting down red tape; eGov services etc. And guess what: voicing these may not be enough anymore; turning it into practice and presenting some real success stories would do the trick.

In my mind, this is the key weakness of the ‘success story’ Maximos Mansion’s staffers are trying to spin to desperate Greek media; these guys some times look like retired wizards who are trying to learn new tricks. The attempt to assign the ‘Grecovery’ to the country as a whole is a stupid shortcut that leads nowhere; what’s more, it seems to jeopardise any positive results secured by Greek people’s sacrifices so far. In modern times, the ‘phoenix’, in order to rise again needs a little bit more than magic and national wishful thinking; for instance, it requires sound management, across the board utilization of digital means and renouncement of partisanship from the handling of state affairs. I doubt that they have anything to communicate in these fields…

To inspire ‘Grecovery’, the government needs some political R&D towards two directions: first, real life solutions and second, communications. No matter what it is commonly argued, the country cannot exit the crisis without state of the art communication strategies and practices that will keep Greek people informed and foreign investors motivated.

European Council President Herman Van Rompuy said some time ago: “…Despite the signs that the worst of the financial crisis is now behind us, despite these modest green shoots, there is still a long way to go to restore our growth prospects, to revive our economies, to heal our banking systems, to create more jobs and to improve welfare across our union. We need to remember that the economy reacts with a time lag: once stability is back, it takes time before this is translated into more confidence, more investment and growth and jobs. And as growth returns, it takes time before the positive impact on employment starts kicking in…”

To this direction, Greece would require a lot more than old-time wizards constructing ‘success stories’ out of thin air, or political mumblings of coalition partners who have lost their role in contemporary politics.

Dr. Demetris Kamaras is the Editor of alyunaniya.com

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