The Prime Minister and the core group leading the economic policy advocate liberalism, defend open competitive markets and firmly believe that through their smooth operation, and to the extent that fiscal and wider economic stability is not disturbed, credibility is gradually gained and together they are shaped the conditions for the creation of new wealth, which, spreading to society through investment, increasing employment and the consolidation of public finances, can guarantee the preservation of the resources of the welfare state.
This is broadly the basic government doctrine, this defines most of the individual policies and this is what the finance minister promotes at every opportunity Kostis Hatzidakis.
Dispute
However, recently the almost dominant liberal neo-democratic doctrine is not performing as expected. New wealth can indeed be created, but its diffusion into society is highly contested, as is the efficient functioning of open liberal markets.
There are not a few who, from the results, estimate that the open liberal markets, in which the ruling New Democracy abounds, tend to turn – if they have not already turned – into purely oligopolistic networks, with all that this implies for the economy and the number of those active in them.
The operation of the four systemic banks is described as typical, following common deposit and lending interest policies, applying identical commission charges to a number of banking transactions and transactions, distinguished by this reluctance to take risks in their financing, taking care of their high clientele, systematically ignoring the small and medium-sized enterprises, as a result of which they do not offer growth opportunities to the entire economy, but only to large and powerful business schemes.
Categories
The criticism leveled at the banks is that they price deposits with almost zero interest rates, they reward the financing of large powerful companies with reduced competitive interest rates and, on the contrary, they charge exterminating interest rates of 6% and 6.5% to the others, old and new, financings. Somehow in 2023, without much effort, they secured profits of 3 billion euros and it is estimated that they will secure more this year as well.
In essence, they are accused of borrowing from depositors at zero interest rates and pricing their loans very expensive.
In other words, the banks, without taking on any separate risk, basically exclude households and small businesses from financing, and at the same time, with high fees on old loans, they are profitably profitable, that is, without attempting anything special.
It is indicative of the fact that in the current booming environment of the real estate market the net balance of mortgages is decreasing rapidly, the repayments far exceed the new loans and of course the new building wealth is concentrated in the expensive areas of Athens, the beach front and the tourist island complex , while on the other hand across the river, in Aegaleo, in Nicaea, in Peristeri and elsewhere, not even a wall is raised.
It is a common belief that there is no competition between banks. Something that can happen if only one tries to open one of the markets e.g. of mortgage loans, which is imposed by the crisis conditions prevailing in the housing market.
In the past there were initiatives by the managements of commercial banks that suddenly changed the conditions of competition. We have been seeing such acts for two decades. The misfortune is that among most bank executives there is no sense of participation and role in the functioning and development of the economy. The only concern is the profits at any cost and the bonuses claimed from them, regardless of how they arise.
Overprofitability
But it is not the only zone where oligopolistic conditions prevail. And in fuel, a corresponding condition is formed. Oligopolistic conditions also tend to form in the health market, where the abandonment of public hospitals, their technological decline, outdated equipment and the slowness of providing medical services send sick citizens en masse to private centers and hospitals, which are rapidly developing at the expense of of the public Health system and earn hundreds of millions of euros a year, part of which is reinvested in modern machines and techniques, as a result of which they benefit and create conditions for the full prevalence of private health.
One could mention other areas of production and trade where the principles of liberal markets are undermined and replaced by oligopolistic schemes that distort competition and create large foci of concentration of any new wealth and its non-distribution, as the initiators of the liberal model would like.
Be that as it may, the evidence is multiplying that confirms that the distortions are excessive and the population is left with the feeling that it has little to expect from any development wave, except to give more and more.
#liberalism #oligopolies
