Dr. Periklis Gogas, Associate Professor and
Mr. Panagiotis Mitrakoulis,
Senior Economics Student, Department of Economics
Democritus University of Thrace, Greece
Greece’s debt crisis, that started in 2010, is the longest and most severe in the country’s modern economic history. Since 2010, when Georgios Papandreou as the prime minister signed the first memorandum of understanding (MoU), Greece implements important fiscal adjustment measures combined with structural reforms.
Fiscal adjustment clauses aim to achieve balanced government budgets or primary surpluses that will help reduce the debt to GDP ratio. The complimentary, in the MoU, structural reforms are designed to increase productivity and international competitiveness. It will be very interesting to justify how labor market reforms, which are among the most painful and spark more public debates in Greece, bring the economy back to the road of development.
Dr. Ngaire Woods is the Founding Dean of the Blavatnik School of Government and Professor of Global Economic Governance at the University of Oxford. She founded and is the Director of the Global Economic Governance Program
Across the world, populists are attracting votes with their promises to protect ordinary people from the harsh realities of globalization. The democratic establishment, they assert, cannot be trusted to fulfill this purpose, as it is too busy protecting the wealthy – a habit that globalization has only intensified.
This article is published in the Social Europe Journal, click on the URL below to read the original posting:
For decades, globalization promised to bring benefits to all. On an international scale, it facilitated the rise of the Asian tigers and the BRICS countries (Brazil, Russia, India, China, and South Africa), produced rapid growth across Africa, and facilitated the boom in developed countries through 2007. It also created new opportunities and augmented growth within countries. But since the 2008 crash, many rich countries have been locked into austerity; the Asian economies have been slowing; the BRICS’ progress has been stalling; and many African countries have fallen back into debt.
Mr. Alexis Papachelas is a guest editorial writer to The Business Thinker. He is currently the Executive Editor of the long standing and highly respected daily Greek newspaper “Kathimerini”.
This editorial is also appearing in Kathimerini.
Are high labor costs the main reason behind Greece’s anemic competitiveness? Most entrepreneurs will promptly respond that this is not the case. (I am not referring here to those operating in sectors flooded with clandestine labor who are not bothered by things like the 13th and 14th salaries or the minimum wage.) Meanwhile, the efforts of several labor representatives to appear on the side of the worker sound extremely hypocritical when everyone knows what really goes on within the unions.
Serious businesspeople deem that the root of the problem lies elsewhere. The policy of automatic pay rises for having worked a certain number of years, for example, is a very big problem which has injected a public servant mentality into private sector employees. Reactionary attitudes among union representatives who refuse to grasp the seriousness of the situation also impacts negatively on jobs. The standoff between unions and employers at the Halyvourgia steel plant is reminiscent of past disasters that accelerated the country’s deindustrialization.