After many centuries Greece has again captured the attention of the world. This time is not about the innovations that Greeks have provided in mathematics, philosophy and arts. However, this note is not about the past but the future. I will not make any comments about the current situation or what has brought us here. I will only make three statements about what can take us out of the dire straits. For the latter to take place we, the Greeks, need to participate in one wedding and two funerals.
The first funeral we have to attend is the productivity of both the public and private sector. The current myth is that the private sector is characterized by high productivity compared to the low productivity of the public sector. Both of them are doing worse compared to the EU average. Most of the countries that are characterized by high productivity are doing well in terms of exports and have an efficient public sector. An increase in productivity needs to also be accompanied with an increase in exports and decrease in imports (with partial substitution).
The second funeral we have to attend is that of high rates of dis-savings. Post-war Greece had a very good record of household savings. The latter was reversed in the more recent decades. Households have to increase their savings. This is particularly difficult as disposable income and consumption is decreasing. However without savings we cannot have investment and without the latter we cannot have growth.
I left the wedding for the end. It represents a fine part of our tradition: education. Greeks always valued education. We keep on forgetting that Greece is still one of the richest nations in the world and if additional criteria are taken into account (see for instance the Human Development Index of the United Nations that also factors in life expectancy, inequality, education etc) ranks 22nd in the world. For this high ranking many variables played an important role. However education is one of the most important factors for determining long-run growth (see here for more evidence). We need to stick to our tradition of having education at the very top of our agenda. Attending these three social events would guarantee that the next generation is not going to face a default.
Note: This article gives the views of the author, not the position of Greece@LSE, the Hellenic Observatory or the London School of Economics.
Sticking to the argument by Professor Panagiotidis of talking about a happy wedding, I would ask if he could explain the response by university professors and students to the newly adopted law on higher education. I don’t mean to spoil the party and I certainly want us all to live happily ever after.
I agree that Greeks have traditionally valued education. That has been a strength which helps explain why Greeks have a very strong and illustrious presence in many of the world’s top universities. But I have a difficult time understanding why there is such violent at times opposition to a law that aims to improve education. I don’t think it is perfect, but it is certainly a good start with which even partisan MPs can agree. This last part is crucial because it places Greek educators and students in higher education even below the level of the partisan establishment, which is widely considered to be at the bottom of the social barrel now!! How can the Greek educational community as a whole (there are significant exceptions of course) behave so irresponsibly in light of the country’s enormous current problems? Is it because they see something many of us don’t, or is it because they are just another vested interest group? Or is it something else? And I am not talking only about students but professors and university presidents who should know better.
Thanks for the comment. It is outside to the scope of this article the discussion on the new law for higher education. Of course any adopted policy that can improve the quality of higher education is more than welcome. However the focus of the article is more on the long-run economic growth.