An EU survey on employment, wages, poverty risks, etc. was recently published. It is a very thorough study (174 pages) with a number of important points and recommendations for different policies.
Anyone interested in the research can find it in the attached hyperlink:
2025 European Semester: Proposal for a Joint Employment Report - European Commission
Key findings
Greece is significantly behind the EU on a number of important indicators:
- Excessive burden of housing costs
- Unmet needs medical care
- Risk of poverty and/or social exclusion, for the whole population and especially for children
- How effective social transfers (benefits, allowances, etc.) are in reducing poverty and social exclusion
- And perhaps most critically, Greece is talking and sliding in wages (in purchasing power terms we are last in the EU) (see picture)
The Commission notes the need for 10 countries, including Greece, to do a deeper analysis because of the serious risk they pose to their potential for upward convergence with the EU
Characteristically it says:
“In light of the findings from the above first-stage analysis, and notably 9 indicators flagging as ‘critical’ or ‘to watch’, Greece is identified as facing potential risks to upward social convergence that require further analysis in a second stage”
Someone will say «How can we do all this if the economy is growing faster than the EU as the government says?».
What is the truth?;
Α. Indeed, for a short period from 2022, Greece's economic indicators show GDP growth above the EU average. But the starting level was much lower (let's not forget the disaster of the 2009-10 bankruptcy that led us to the memoranda). It is to be expected that the GDP index would have grown faster. But the issue is more reaping the benefits of the increase in wealth produced. And unfortunately the evidence shows that it reinforces inequality and wealth is being transferred to the benefit of profits at the expense of labour. This is happening in Greece to an incredible degree which is why we are constantly losing ground on wages compared to the EU and why we are stuck at the bottom.
Β. The second issue, and in my opinion equally important, is what are the main drivers of GDP growth and whether growth is sustainable and changes the fate of the country. Unfortunately, the main driver over the last two years has been mainly consumption. Production activity (and product exports) remains anaemic and we are even losing ground. And it is not sustainable either. In my humble opinion, contrary to the government's triumphalism, the policies being implemented are not leading the country in the right direction. In fact, they are repeating the strategy that led us into bankruptcy in 2010. They are shaping a very vulnerable country, with services and tourism as its main activity, without a strong productive base. Even the opportunity of the Recovery Fund is being squandered on myriad irrelevant «investments», with Tourism leading the way, while the absence of serious productive investment in industry/manufacturing shines through.
I firmly believe that another policy to change the productive model and the productive future of the country is possible. But it requires another state and another political will. A state that will play a strategic and operational role (where needed, e.g. in energy) and will not delegate everything to the «Market Forces» And a policy that puts the country and its future above the profits of cosmopolitan funds that simply buy Greek companies and whose contribution to development is zero.a
But first we have to believe it ourselves.
