Op-Ed/ The rhetoric on rupture is wrong

Op-Ed/ The rhetoric on rupture is wrong

Athens, March 29, 2015/ Independent Balkan News Agency

By Nikolaos Kaliakoudas, Economist

It is with great surprise that we witness lately a rhetoric of rupture, cultivated irresponsibly in my opinion, by several ministers, believing that in this way they are contributing to the negotiating “success” of the country. They are making, however, a big mistake. The only thing these statements do is harm the liquidity of the real economy, which is already “choked”! Do they, I wonder, realise the damage they cause to the savings base of the country, which is normal to react with massive withdrawals from banks.

From the Greek banking system, before and after the elections, a total of EUR 26 billion have been withdrawn! The savings base of Greek banks has “hit rock bottom”, with all that this implies for the financing of businesses and households. Not to mention the use of the savings of public organisations to address current overdue needs of the state. All these constitute a real suffocation for the economy, as I pointed out in my previous article.

It was not enough that until now, we had the daily threat of Grexit, from Schäuble and Dijsselbloem, and the vultures of the european status quo, we now experience “hits” from the inside as well.

However, the serial of the negotiation must end as soon as possible. for this to happen the contribution of both sides is needed. I do not agree with the rhetoric of rupture, jihadists etc., that do not lead to a calm and with arguments addressing of the economic situation.

In regard to the real economy, there is the need for a turn – not just for communication purposes – towards growth, employment and the restart of the economy. Already there is a serious liquidity problem in light of Easter, with many professional groups complaining. Imports of basic commodities are being made in cash (remittance in advance), because foreign suppliers no longer accept the other financial tools of the Greek banks. Of course, for someone to understand these issues, it is not enough to simply have a theoretical approach, but needs to live the situation every day.

In addition, serious reforms in the public and tax collection mechanisms at all levels are imperative. At least, it seems that this government has the will to deal with this third world phenomenon. Tackling bureaucracy and corruption, in combination with the use of digital technology, which today can give immediate results, should become the daily target of the government. Many points and ills of public administration should be corrected.

There is the need for a change of the production model of the country at any political cost, which at some point, will be taken. There is no time to lose, even if the debt disappears tomorrow. The way the greek economy is structured, there is little room for recovery, making it imperative for the process of production reconstruction and modernisation of the state to begin as soon as possible.