Un plan para la recuperación de Grecia
ATHENS
– Months of negotiations between our government and the International
Monetary Fund, the European Union, and the European Central Bank have
produced little progress. One reason is that all sides are focusing too
much on the strings to be attached to the next liquidity injection and
not enough on a vision of how Greece can recover and develop
sustainably. If we are to break the current impasse, we must envisage a
healthy Greek economy.
Sustainable recovery
requires synergistic reforms that unleash the country’s considerable
potential by removing bottlenecks in several areas: productive
investment, credit provision, innovation, competition, social security,
public administration, the judiciary, the labor market, cultural
production, and, last but not least, democratic governance.
Seven years of debt
deflation, reinforced by the expectation of everlasting austerity, have
decimated private and public investment and forced anxious, fragile
banks to stop lending. With the government lacking fiscal room, and
Greek banks burdened by non-performing loans, it is important to
mobilize the state’s remaining assets and unclog the flow of bank credit
to healthy parts of the private sector.
To restore investment
and credit to levels consistent with economic escape velocity, a
recovering Greece will require two new public institutions that work
side by side with the private sector and with European institutions: A
development bank that harnesses public assets and a “bad bank” that
enables the banking system to get out from under their non-performing
assets and restore the flow of credit to profitable, export-oriented
firms.
Imagine a development
bank levering up collateral that comprises post-privatization equity
retained by the state and other assets (for example, real estate) that
could easily be made more valuable (and collateralized) by reforming
their property rights. Imagine that it links the European Investment
Bank and the European Commission President Jean-Claude Juncker’s €315
billion ($350 billion) investment plan
with Greece’s private sector. Instead of being viewed as a fire sale to
fill fiscal holes, privatization would be part of a grand
public-private partnership for development.
Imagine further that
the “bad bank” helps the financial sector, which was recapitalized
generously by strained Greek taxpayers in the midst of the crisis, to
shed their legacy of non-performing loans and unclog their financial
plumbing. In concert with the development bank’s virtuous impact, credit
and investment flows would flood the Greek economy’s hitherto arid
realms, eventually helping the bad bank turn a profit and become “good.”
Finally, imagine the
effect of all of this on Greece’s financial, fiscal, and social-security
ecosystem: With bank shares skyrocketing, our state’s losses from their
recapitalization would be extinguished as its equity in them
appreciates. Meanwhile, the development bank’s dividends would be
channeled into the long-suffering pension funds, which were abruptly
de-capitalized in 2012 (owing to the “haircut” on their holdings of
Greek government bonds).
In this scenario, the
task of bolstering social security would be completed with the
unification of pension funds; the surge of contributions following the
pickup in employment; and the return to formal employment of workers
banished into informality by the brutal deregulation of the labor market
during the dark years of the recent past.
One can easily
imagine Greece recovering strongly as a result of this strategy. In a
world of ultra-low returns, Greece would be seen as a splendid
opportunity, sustaining a steady stream of inward foreign direct
investment. But why would this be different from the pre-2008 capital
inflows that fueled debt-financed growth? Could another macroeconomic
Ponzi scheme really be avoided?
During the era of
Ponzi-style growth, capital flows were channeled by commercial banks
into a frenzy of consumption and by the state into an orgy of suspect
procurement and outright profligacy. To ensure that this time is
different, Greece will need to reform its social economy and political
system. Creating new bubbles is not our government’s idea of
development.
This time, by
contrast, the new development bank would take the lead in channeling
scarce homegrown resources into selected productive investment. These
include startups, IT companies that use local talent, organic-agro small
and medium-size enterprises, export-oriented pharmaceutical companies,
efforts to attract the international film industry to Greek locations,
and educational programs that take advantage of Greek intellectual
output and unrivaled historic sites.
In the meantime,
Greece’s regulatory authorities would be keeping a watchful eye over
commercial lending practices, while a debt brake would prevent our
government from indulging in old, bad habits, ensuring that our state
never again slips into primary deficits. Cartels, anti-competitive
invoicing practices, senselessly closed professions, and a bureaucracy
that has traditionally turned the state into a public menace would soon
discover that our government is their worst foe.
The barriers to
growth in the past were an unholy alliance among oligarchic interests
and political parties, scandalous procurement, clientelism, the
permanently broken media, overly accommodating banks, weak tax
authorities, and a weighed-down, fearful judiciary. Only the bright
light of democratic transparency can remove such impediments; our
government is determined to help it shine through.
Yanis Varoufakis es ministro de Finanzas de Grecia.
06 de mayo 2015
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