Wasting time
The Ministry of Finance shows, as a rule, a certain self-restraint. It knows it is walking a tightrope. Such was the case in April, long before the European Parliament elections, when Finance Minister Kostis Hatzidakis rushed (as if he was afraid of something) to prevent future pressures on fiscal stability. In an explicit and categorical way, he said the ministry would exercise moderate fiscal management in 2025. The state budget, he said, can withstand handouts of up to 870 million euros in 2025 – versus of 2.5 billion euros this year.
Given these facts, the ministry caused negative comments recently when it suddenly “discovered” that there is actually an extra 350 million euros available for additional handouts until the end of the year. Surplus and deficit are mutually exclusive concepts. Perhaps, however, this recent discovery would have gone largely unnoticed if it had been an isolated event. It is not.
There are other examples of progressive “fiscal relaxation,” such as the regulations on fighting tax evasion among the self-employed, which are being edited; the mandatory installation of cash register-integrated POS terminals, which is being repeatedly postponed, adding exceptions; the extension to the provision of cheap electricity especially for farmers – perhaps to counter the nonexistent agricultural development policy; and, once again, the increases in pensions (this time, not to the lowest ones), instead of taking care of other big social problems, such as the needs of the National Health System (ESY).
What should have been done was not done and what should not have been done was done
After five years, the government looks tired, as if it looking for a direction. The five years in power is weighing heavily on it. What should have been done was not done and what should not have been done was done. The most serious of the latter? The economic support for weak households required due to the Covid-19 pandemic and the subsequent energy crisis was derailed and at times took on the characteristics of a budget spending spree. About 60 billion euros was distributed to anything that moves in the country, often with opaque, clientelistic criteria. And this may have contributed to the achievement of the famous 41% the conservatives secured in the last national election, with the European Commission turning a blind eye. But this fiscal derailment had zero or no impact on social needs.
Where are we today? Not much has changed. Greece remains at the bottom of the 27 EU member-states in productivity, with a unique archipelago of very small businesses, and a record of tax evasion (what was once a means of survival has now become a systemic tool of enrichment). The country also claims one of the first positions in Europe in outsized corporate profits, and one of the last in the real value of wages and the share of wage labor in GDP.
More to the point, Greece’s economic distance from other – including neighboring – countries continues to grow. We have no time to waste. Greece needs a dynamic reboot that will change its trajectory now – all the more so since the “2032 trajectory” is leading it straight into a new wall. Those who argue that the political system should be allowed to complete the circle of this crisis it is in before reconstruction begins, thinking that “Hey, we have time,” will probably prevail. But they may be unpleasantly surprised when the time comes.
