Bold decision-making for avoiding the financial crisis

Since our Federation’s bulletin for the months of November and December is released in January, this article traditionally refers to our expectations for the New Year. And this year will be no exception, as I do not intend to change this tradition in this, the final year of my tenure.

2009 has been named the year of recession: the European Commission predicts that the Eurozone economy will shrink, while there will be a rise in deficits and a drop in inflation. For our country, forecasts on economic growth are marginally positive, in contrast to the outlook for the rest of the Eurozone.

At the same time I wish to remind you of something I pointed out in my previous article. “Unfortunately here in Greece we have no lines of defence against these crises; we are totally dependent on oil, and have no resistance to inflation, rising prices and unemployment. And as usual, we have failed to set anything aside for a rainy day”.
Taking the current situation into account, I believe that we will have to make do with our 2008 incomes in 2009. Under no circumstances can this be considered as tragic. What would be tragic is for our economy to enter a phase of contraction instead of growth. This is where the great risk lies, as this would have severe consequences on employment.

Unfortunately, in such a case – which I hope will be avoided – the consequences would be particularly grave for the regional economy, and especially on the regional industrial sector. By way of example, I will highlight one point in order for us to grasp the difficult predicament in which the Greek industrial sector finds itself, though the worst is yet to come. According to data of the National Statistical Service of Greece (NSSG), the global financial crisis has brought about a 15.4% decrease in industrial sales in November 2008, compared to sales in the same month of 2007. Based on the qualitative data that I have gathered from my fellow Northern Greek industrialists, I believe that the corresponding drop is far greater in Northern Greece than in the rest of the country.

This data, whether real or a mere forecast, is unfavourable to us. The risk of facing problems as a society due to the potential outbreak of unemployment is lurking, and therefore, even now, it is necessary to take measures to support the real economy so that in the event that our economy does not grow over the next few years, we will at least be in a position to hold on to what we have achieved in the past.
These measures may not be pleasant for many of us, but it is perhaps an opportunity for the Greek State to get its affairs in order, by reducing unnecessary expenditures to a minimum, thus becoming more productive, and finally by drastically reducing the cost of bureaucracy, which is a burden on citizens' everyday lives, and especially on the operational aspect of businesses.

We are aware of the decisions that need to be made. Indeed, we are aware of the right decisions. However, the question is: what is the so-called political cost of taking the right measures and decisions in order to deal with the financial crisis.

The concept of political cost can lead us to procrastination and finally to failure. And failure in this case will be twice the size because, although we are aware of the right decisions that need to be made, we either do not make these decisions or, even worse, we make the wrong decisions. The result is that there is no serious reaction on the part of society or such a reaction is muted.

In any event, I believe that the current crisis may be seen as an opportunity to re-examine our financial policy during this New Year, to improve our social policy and increase our investments mainly in human capital, (in other words, in education and research), in order for the Greek economy to become more productive.
All that is needed is for us to decide, at last, to make this happen. This is my main expectation for the New Year.