They often ask me, people I don't know, how things are going in the economy. They do it with a certain amount of concern, I admit that it is difficult to give a clear answer, as I am sure they wish. Because the right answer is that the economy is doing better than any other period since we entered the Eurozone, with two major problems.
One problem is that the wages the economy actually offers to employees are lower than those that would require an improvement in the standard of living similar to that we lived for a decade, between 1999 and 2008.
The other problem, which explains the previous one, is that bank and other credit to economic activity, that is, new loans are few, selective and, more generally, are not sufficient to increase individual wealth faster, to add new income to existing ones.
So the answer is that while we're doing well, we don't seem to have the conditions to go any better. But what the country urgently needs is to run for the best. The «We're doing good.»It's not enough. We need to move faster, in more directions, deepening our abilities where we do better.
The government celebrated yesterday - and well done - as the European Commission removed Greece from the list of Member States in which there are macroeconomic imbalances. We were on this list when the fiscal crisis broke out, that is, 15 years ago. Obviously, it is not wrong for the K1 and K2 of the government to underline it triumphantly, but, in practice, the recognition of the efforts made by wage workers, competing enterprises and those others who have had to strain themselves to achieve the budgetary balance does not change the absence of overall dynamism of the economy.
There is also something almost ironic in this Commission decision since the two other countries that came out of the same list are Sweden and the Netherlands, while Italy, Hungary, Slovakia and Romania remain under this surveillance, with the latter facing terrible imbalances.
At the same time as other reports, the Commission adopted the special report on the implementation of the programme. «Deep» Report by and Greece. In going through the observations he makes in this examination, he finds that indeed while we are doing better, we are not doing well enough. Judge yourself from the main outline of the Report:
«The Greek economy is still characterized by high but declining public and foreign debt indicators, while the current account deficit remains high and the restructuring of non-performing loans outside the banking sector remains slow.
Wise fiscal policy and the steady growth in nominal GDP have supported the sharp decline in the debt ratio to GDP in recent years. At the same time, the current account deficit remained high, thus limiting the improvement of the net international investment position (NIIP). The strong recovery after the pandemic was accompanied by a rapid increase in jobs, reducing the unemployment rate to the levels observed before the global financial crisis.
However, both nominal and long-term unemployment rates are among the highest in the EU and the employment rate is much lower than the EU average. The Greek Property Protection Program («Hercules-Red loans») enabled banks to transfer their old non-performing loans (SDRs) and thus improve their balance sheets. However, the resolution of the remaining SDRs —which are now largely managed by servicers— He went slow. Therefore, SDRs are still a brake on the economy.
Overall, thanks to increasing labour participation, increased investment and structural reforms, Greece's growth potential is estimated to have increased further. However, stronger GDP growth would facilitate faster debt reduction as well as a reduction in income gap against the EU».
It's what I told you: so-so, but it's not enough. One wonders whether there is a plan when, in a few months, the funds of the Recovery Fund (RFF) will have ended. Two diagrams, included in «Deep» Report support this concern.
One (p. 13 chart b) describes the degree of complexity of Greek exports to products and services (export complexity). Our country is very low, although there is an improvement. We need much faster and only processing, in industry and in the export agricultural sector, but also upgrading the tourist product can achieve that.
The other element (p. 13 diagram e) reminds us that for fifteen years we have been constantly losing points in productivity per hour of work. There has been improvement here too in recent years, but slow. Wholesalely, in 2010 we were very close to the Union, mainly because we took advantage of the entry into the euro and the banking system financed the effort. Since then, however, a large scissors, nearly thirty units, have been opened.
So when we talk about the economy we have to agree that everything must revolve around the production of a new product and forget about redistributions and other subsidies and state blues.
Then we can only say that we are doing quite well but we will certainly do better.
