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I
n Greece, in particular, it is argued that the
main characteristics of the economic crisis
and the recession are a confidence and relia-
bility deficit, as well as their manifold nature and
twin causes (public deficit and debt, external
deficit and debt). We believe, however, that the
current situation of the Greek economy is rather
grave, in the sense that, apart from the public
deficit and debt, it is also plagued by an intensely
unequal income distribution, high unemployment,
the personalization of work contracts and the dis-
mantling of the social state, as well as the col-
lapse of its productive base in regard to techno-
logical advance and innovation.
In addition, liquidity injections and interest rate
reductions fail to deal with the deepening of the
economic crisis by establishing the necessary
conditions for its containment on the national,
European and international levels. The main rea-
son for this serious failure of liquidity enhancing
measures is the “one-sided support of creditors,
disregarding borrowers”, as well as inflation tar-
geting, an economic policy pursued in particular
by the European Central Bank, instead of the
strategic pursuit of enhancing the development
process, remedying the unequal distribution of
incomes and reversing the institutional violations
of the collective nature of labour relations and the
social state, as well as dealing with unemploy-
ment. In other words, if the plan for containing the
economic crisis on the international and European
levels, and especially in Greece, does not include
measures for enhancing demand, attending to bor-
rowers, fostering the necessary conditions for
growth and supporting the investment activity of
Small and Medium-sized Enterprises, then the
Greek economy will be subject to huge negative
pressures both in 2012 and 2013.
These estimates translate into the perpetuation of
negative growth rates, the underutilization or clo-
Trade with Greece
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The financial crisis admittedly continues to evolve, hit-
ting the real economy in both the US and Europe, lead-
ing to reduced output and exports, reduced orders, more
lay-offs, increased unemployment and reduced wages,
despite the “liquidity injections” given to banking-
financial institutions.
The prospects of the
Greek economy:
the way out of the
impasse
By Yannis Panagopoulos,
President of the Greek General Confederation of Labour (GSEE)