The British economy is very different from the Greek one. And of course they are far from each other. However, in the current decade they both fell into major crises for completely different reasons.
Ours found itself in a state of bankruptcy, to avoid which it needed bailout loans against which it accepted binding memoranda and dramatic domestic devaluation policies, which still weigh on it and do not allow it to escape the cycle of slow, torturous recovery.
The policies of the neo-democratic government so far have not yielded the expected results and the current economic policy’s aspirations seem sluggish and in any case do not point to leaps of progress that the country needs.
Leaps of progress
The projections of the medium-term program have growth rates falling to the 1% zone after 2026, when the impact of the Recovery Fund ends. There is a common belief that the implemented economic policy scheme is not enough to free it from the rust of the long crisis and that another, more dynamic economic policy scheme is needed in order to achieve the leaps of progress that the country needs and that Greek society claims.
The British economy, on the other hand, due to Brexit and the conservatives’ obsession with restrictive policies, which were supposed to support its disengagement from the rest of Europe, recorded serious losses and entered a long period of stagnation and retreat on almost all fronts, productive, economic and social.
The British economy has lost its dynamism, multinationals are abandoning it, powerful shipping companies are looking for other centers, its basic production infrastructure is threatened with collapse, the once exemplary national health system is in danger of obsolescence, the also popular British universities are constantly losing students and only football remains thriving and thriving.
Complete reversal
The new Labor government, in tabling its first budget to deal with the deep crisis left behind by the Tories, completely overturned the economic policy mix, changing even the fiscal rule, because simply raising taxes and of insurance contributions by £40 billion was not enough to cover the excess of the budget deficits, nor certainly to support the policies of retrenchment of the British economy.
Investment shock
Thus, in addition to taxes on capital and business profits, Britain will seek another approximately 70 billion until 2029. sterling from international markets in order to finance its economic recovery and regeneration.
Labor decided that the British economy needed a strong investment shock to recover and regain its rightful place in the global economy. The truth is that the choice of the “investment rule” and the resulting lending carries risks, it incorporates a high level of risk, which can prove painful if the yield curve shifts again.
However, it is of great interest that close to £22.5 billion will be directed to the now long-suffering health sector and another £5 billion to the education sector. The turnaround is big and change is rare, the risk was taken and it remains to be seen whether this choice will pay off and turn the tide for the UK economy.
Fixed pattern
On the contrary in Greece, the government here insists on the current scheme which essentially remains unchanged from 2019. The economic staff and the Prime Minister insist that it works and is sufficient given the international, geopolitical and other conditions. And currently they show no inclination to change, rather they maintain the pattern of slow, if not stable as Kostis Hatzidakis claims, recovery.
The truth is that Greece does not have the same ease of recourse to international markets as Great Britain has. It hasn’t even earned the long-sought investment grade yet, and a similar move would have almost no luck. However, this does not negate the need for an early and bold shift in economic policy, before the opportunity is lost and the current favorable conditions are dismantled.
Supports
If there is something common in the Greek and the British economy, it is the need for an investment shock, a political rebirth and reconstruction, which obviously cannot occur without capital aid and support. The adoption of eternal doctrines of patience and discipline are not enough to lift the weight of the losses of the great crisis, the amount of which, according to the moderate calculations of the former president of Piraeus Bank Michalis Salla, amounts to 600 billion euros. In order to overcome the burdens of the long-term economic crisis, another plan and another state, another administration is needed, which will expand and equally distribute opportunities and make more and more citizens participants. By excluding small and medium-sized businesses from projects and developments, by preferential treatment of friends and elites, it will never be freed from the shackles of the crisis.
Leap forward
Greece must seek, within the framework of its possibilities, the resources for the claimed leap of progress. To find, through bold changes in the economic policy mix, the scheme that will conserve development resources and distribute them or better diffuse them in a fair and inclusive manner throughout the economy. The arguments that want small and medium-sized enterprises to be weak and unable to meet the strict European credit rules, do not stand.
There are also special purpose investment banks that can help in the direction of changing the production model. Otherwise, the misery of anemic growth will eat up the nutrients of the Greek economy time after time, steadily dragging it into the next great crisis…
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