Saturday, September 22, 2012

A Growth Model for Greece

Greece urgently needs a shift in gears: away from the single-minded focus on Troika-negotiations and more towards a focus on future perspectives for the country. Otherwise, it may well happen that the Troika-operation turns out successful but the patient may not have survived it in sound body and mind.

Greek leadership is impressively resistant to advice. In fact, I would argue that Greek brainpower in general is quite resistant to advice. There have been important initiatives from international institutions regarding possible Greek policies. I am not aware that any of them triggered any discussion among Greek leadership and brainpower at all.

No single person or institution will have the right answers to all of Greece's problems but Greece is, in my opinion, in no position at all to turn down advice or, even worse, to ignore it. Instead, Greek leadership and brainpower should trigger intense discussions of all possible solutions.

I, for one, have two favorite proposals for Greece's future and I have written at length about them. One proposal ("EURECA") would address the country's debt problem and the other one ("Greece 10 years ahead") would address the country's economic problem. 

Both proposals are a little over a year old. I venture to say the following: had Greece jumped on both proposals at the time, we would be talking about a different (and much more positive) Greece today!

My personal inclination is always on the side of the real economy (the "underlying") and much less so on the sovereign debt issues (the "derivative"). Thus, I will not discuss EURECA here. Instead, I will focus entirely on the recommendations of "Greece 10 years ahead".

"Greece 10 years ahead" (GTYA) is a fascinating presentation. Unfortunately, it will frustrate the "give-it-to-me-on-one-page"-reader because a well thought-out National Economic Growth Model cannot be put on one page. Still, I can only recommend that as many people as possible take a few hours of their time and go through the 72 pages in detail.

I will make my own contribution to the spreading of a GTYA-mindset. Since the whole presentation can't be put on one page, I will write several posts with each one of them focusing on indidual aspects of GTYA. Perhaps that will reach "give-it-to-me-on-one-page"-readers who would otherwise never become familiar with GTYA.

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