No magic solutions
Politicians have begun sounding like fashion designers of late; the main opposition PASOK party’s former economic policy coordinator Giorgos Floridis had proposed Greece’s adoption of the «Scandinavian model» on job sackings, Economy Minister Giorgos Alogoskoufis recommended the «Irish model,» while Brussels has been greedily coveting the Swedish recipe of «flexicurity» (a combination of flexibility and security). But the issue for us in Greece is not whether the «Swedish model» – to take but one example – really is a successful solution or a paradoxical mixture of protectionism and liberalism, the welfare state and hire-and-fire policies. The issue is, rather, that our politicians are more interested in making an impression. It goes without saying that it is their job to study economic models that have been successfully implemented elsewhere, to use as a basis for comparison and for drawing useful conclusions; but it is laughable to speak of the adoption of a foreign model. Just because such a model has worked elsewhere does not mean it can be imposed upon another system. For example, the Irish model comprises not just low taxation of corporate gains – which attracted foreign investment to Ireland initially – but it also involves high salaries. The Danish and Swedish models not only comprise «hire-and-fire policies» but also a sturdy welfare state, 4.5 percent of GDP going to employment subsidies, training programs, unemployment subsidies, and less than 5 percent unemployment. And although employers may be free to fire staff at will, there are considerable guarantees for new employment. But in Greece, we do not have a strong welfare state, large subsidies, fair taxation or low unemployment. So if we were to adopt Ireland’s low taxation and Sweden’s hire-and-fire policy we would create a Greece only marginally less bad than it is now. It seems that our politicians do not know what they want despite their invocation of ostensibly miracle-working models. Or perhaps this is a way of disguising their own shortcomings.
