A Nobel laureate assesses the Greek economy

The new production model that Economics Nobel Prize Laureate Christopher Pissarides had proposed for Greece in an extensive report five years ago and which was supposed to serve as a blueprint for the country’s transformation into a modern, innovative economy has not materialized.

In an interview with Kathimerini, the respected London School of Economics professor notes that while some reforms have been implemented – “this has been picking the low-lying fruit” – the more difficult and essential ones have not.

The main obstacles? Not having simplified the country’s public sector bureaucracy, and continuing with the outdated model of family-run businesses. Greeks like small shops, small businesses; they want to be the director, have their family working with them. The mentality of starting a business with just one or two employees needs to change, he says.

The co-recipient of the 2010 Nobel Prize in Economics – along with Peter Diamond and Dale Mortensen – believes that Greece should prioritize agricultural production, especially given the popularity of the Mediterranean diet.

He added that the country should also focus on export-oriented companies, not those that only aim for the Greek market; in this context he even sees the possibility of Greece producing small electric cars designed for European cities.

Then, there’s the need to shift to other forms of growth that do not require so much staff, because Greece’s population is dwindling – a reality that is problematic for tourism as well, a sector that serves as a main source of income and one that needs a lot of hands.

Last, but definitely not least, there is the need to bring back the well-educated Greeks that have left and are still leaving to work for high-tech companies abroad. Their return, which can and should steadily materialize with the right incentives, would serve as a major part of the turnaround in economy needs.

Despite the timing being ripe following last decade’s crisis, and the rare “gift” the country got from the EU’s Recovery and Resilience Fund’s immense resources, as well as the pro-reform rhetoric, a lot has not been done. This dire reality brings to the forefront the simple question: If not now, when? 

Source: ekathimerini.com