The economic policy of the Mitsotakis government is limited to ensuring fiscal surpluses and there is no concern for the development of the private sector of the economy. The combination of a policy of containing fiscal spending and increasing tax revenues with a non-existent private sector undermines the growth rate, deprives incomes and jobs, causes economic and social inequality, intensifies the demographic problem, suffocates the Greek economy and excludes any prospect of increasing prosperity.
It sounds heavy, but it is explainable. The economy has two sectors: the public and the private. Under ideal conditions, the private sector offers growth rates and increases prosperity, while the public sector ensures a high level of administrative services, Health, Education, Justice, security and modern infrastructure. In times when the private sector suffers, the public sector triggers growth with investments in infrastructure, i.e. public works, and maintains demand with increases and hiring, until the private sector gets back on its feet.
Today, the Mitsotakis government is exclusively concerned with ensuring surpluses in the public sector. From large deficits, we have gone to large surpluses based on overtaxation.
For the private sector, things are tragic. We have no businesses. The government’s view, its pursuit and its action is to support very large businesses at the expense of small and medium-sized ones. This is an economic model that not only does not suit the country but also condemns the economy. A country small in population and area, like Greece, cannot have many large businesses. It has two or three large companies in each sector, and this means oligopolies, which always create cartels, coordinate their practices and prices, and increase their profits at the expense of everyone else. At the same time, instead of competing with each other, they cooperate, suffocate, or absorb smaller companies, and eliminate competition. They create obstacles to the activity of new companies, either through their practices or in cooperation with the government, which sets bureaucratic obstacles. Cartels are everywhere, in banks, in transport, in communications, in construction, in industry, in wholesale and retail trade, in all sectors without exception.
This is what the government has achieved today with its policy. It burdens small and medium-sized companies, prevents new companies from entering the market, and protects and strengthens the action of cartels among large companies.
The business environment today is completely hostile to medium and small businesses, to investments, to new businesses.
As demonstrated by the official data, the foreign investments that the government was celebrating are unproductive, they concern the acquisition of existing tourist units and real estate, they do not offer jobs or income and it is very easy for foreign investors to liquidate their investments and leave, taking their profits abroad.
Greeks do not make productive investments because they do not want to get involved with the State, with the paranoia of bureaucratic requirements, with the ambiguity and interpretations, with the difficulty of licensing, the approvals from many agencies that must be agreed upon in order to do anything, with corruption and time-consuming procedures, the speed bumps, the political means required and much more. And if someone finally persists and endures all these terrible obstacles, they will be faced with high overt and covert taxation, payment delays that exceed six months and reach a year many times, the prepayment of all taxes and tax advances, fines, the prohibition of offsetting liabilities and receivables with the State, the complete lack of bank financing, the suffocating lack of liquidity, heavy non-wage costs, the highest energy costs in Europe. And if they have to resort to the courts to find justice, they will probably have closed their company before the trial is finalized.
These are not all, there are many more that small and medium-sized businesses face every day, and the state is to blame for all of this without exception.
Because they have no businesses in Greece, young people are leaving abroad to find work, worsening the Demographics. Because they have no businesses, they have no production and they import everything. Because they have no businesses, they have neither technology nor prospects for the foreseeable future.
The government should prioritize simplifying the investment and business environment in order to create modern productive businesses, open jobs and wages, accelerate the growth rate and increase prosperity in the country.
However, he has chosen a different policy, avoided reforms that would bring sustainable growth, focused on excessive increases in tax revenues, protected and strengthened cartels, created fertile ground for extortion and profiteering, and now that he is aware of the dissatisfaction of voters whose incomes are not enough to cover their monthly expenses, he prefers to give benefits and raises, weighing the pros and cons of each benefit with micro-political – electoral criteria.
This policy offers absolutely no prospects for the economy, increases its dependence on imports, does not strengthen the country’s economic independence and the well-being of its citizens, creates severe social inequalities, strengthens the emigration of young people abroad and intensifies the demographic problem.
Theoretically, based on the electoral timetable, the government has both the time and the parliamentary power to proceed with bold reforms in order to improve the investment and business environment and trigger a growth wave that will increase the well-being of all. The question (rhetorical because the answer is obvious) is whether he wants to make reforms or whether he has chosen to maintain the clientelistic state, in which the government and civil servants, relying on a complex network of laws and bureaucratic procedures, control everything, prevent private initiative, absorb all the liquidity of the economy, collect all the money and distribute gifts in the form of subsidies to their citizens, in exchange for their votes.
