Greece – Britain: The parallel economic life and shock needed

The British economy is very different from the Greek economy. And of course they’re a long way from each other. However, in the current decade they both fell into big crises for completely different reasons.

Ours was in bankruptcy, to avoid which it needed rescue loans against which it accepted binding memoranda and dramatic internal devaluation policies, which still weigh it down and do not allow it to escape the cycle of slow, excruciating recovery.

So far, the policies of neo-democratic governance have not yielded the expectations and aspirations of the current economic policy seem subdued and in any case do not refer to any progress jumps that the place needs.

The forecasts of the medium-term programme bring growth rates to decline in the 1% zone after 2026, when the impact of the Recovery Fund is completed. It is common belief that the current economic policy scheme is not enough to rid it of the rust of the long crisis and that another, more dynamic economic policy plan is needed in order to achieve the progress that the country needs and claims by Greek society. The British economy, on the other hand, because of Brexit and the obsession of conservatives in restrictive policies, which were supposed to support its release from the rest of Europe, recorded severe losses and came to a long period of stagnation and retreat on almost all fronts, productive, economic and social.

The British economy has lost its dynamism, multinationals abandon it, strong maritime looking for other centers, its basic productive infrastructure is threatened with collapse, the once exemplary national health system is at risk of devaluing, also popular British universities are constantly losing students and only football remains flourishing and thriving. The new Labour Government, by submitting its first budget in order to deal with the deep crisis left behind by the Tories, has made a complete reversal of the economic policy mix, with a change in even this financial rule, because simply increasing taxes and insurance contributions by £40 billion was not enough to cover the excess of budget deficits, nor, of course, to support the policies of bringing the British economy up. Thus, in addition to taxes on capital and business profits Britain will seek by 2029 some £70 billion from international markets to finance its economic recovery and rebirth.

Labour found that the British economy needed a strong investment shock to restore and regain its position in the global economy. The truth is that the choice of the ‘investment rule’ and the resulting borrowing involves risks, incorporates a high level risk, which can prove painful if the interest rate curve changes again.

However, it is extremely interesting that close to £22.5 billion will be directed to the most suffering health sector and another £5 billion in education. The turn is great and the change is rare, the risk has been assumed and remains to be proven whether this option will pay off and change the course of things for the British economy.

Unlike Greece, the government here insists on the current shape that has remained unchanged since 2019. The financial staff and the Prime Minister insist that it delivers and suffices given the international, geopolitical and other conditions. And at present they show no mood for change but maintain the pattern of slowness, except stable as Kostis Hatzidakis argues, recovery.

The truth is that Greece does not have the same comfort of recourse to international markets as Great Britain does. He has not even won the claimed investment grade for years and any corresponding move would have almost no luck. However, this does not negate the need for a timely and courageous shift in economic policy, before the opportunity is lost and the current favourable conditions are deconstructed. If there is anything common in the Greek and British economy, it is the need for investment shock, a policy of regeneration and reconstruction, which obviously cannot arise without capital aid and support. The adoption of perpetual doctrines of patience and discipline is not enough to lift the burden of the loss of the great crisis, the amount of which, according to moderate calculations by the President of Piraeus Bank Michael Salla, amounts to 600 billion euros. In order to overcome the burdens of the long-term economic crisis, another project and another state, another administration, will expand and equalise opportunities and make more and more citizens involved. With the exclusion of small and medium-sized enterprises from projects and developments, with privileged treatment of friends and elites will never be relieved of the bonds of crisis.

Greece must always seek, in the context of its potential, the resources for the requested leap of progress. To find, through brave changes in the economic policy mix, the scheme that will save development resources and distribute them or better distribute them in a fair and inclusive way throughout the economy. The arguments that want small and medium-sized enterprises weak and unable to cover the strict European credit rules do not stand. There are investment, special purpose banks, which can help change the production model. Otherwise, the misery of anemic growth will consume time and time the insides of the Greek economy, steadily dragging it into the next major crisis…