By Vassilis Kostoulas
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@VasKostoulas
It’s a leitmotif heard often in Greece since 2010, namely, that the primary source of the ongoing economic and social crisis in the recession-plagued country is neoliberalism.
In order to back up the veracity of this position it’s necessary to examine whether Greece truly enjoys the benefits of an open and free economy, or the negative results from this assumed “neo-liberal” encroachment on Grecian soil. In other words, is the “Greek model” a neo-liberal model?
Studies, however, show that economic freedom in Greece is amongst the worst in the developed world. One index, compiled by the Heritage Foundation in cooperation with the Wall Street Journal, is indicative. In the index’s international rankings for 2016, Greece ranks 138th place out of a total of 178 countries — including Bangladesh and Mozambique — an unheard of standing for a Eurozone member-state.
The index ranks economic freedom in Greece at 53.2, down 0.8 from 2015, and 41th in Europe.
Based on the standing, the country’s three primary disadvantages are mostly detected in three sectors: management of public finances, corruption and regulatory effectiveness.
Specifically, in terms of public spending, Greece is given a grade of 0.0, with a further observation warning that that state expenditures total more than 50 percent of GDP.
Nevertheless, most political forces in Greece have long expressed their unwillingness to consider a much more open and liberal Greek economy. One “venerable” characteristic of the Greek economy is the fact that a large chunk of economic activity in the country is still controlled, directly or indirectly, by the state.
Even after seven years of unprecedented post-WWII economic meltdown, the Greek state still is involved in practically all business sectors, while at the same time retain an institutional framework to protect all types of monopolies, oligopolies and closed markets.
One well-known expert on Greece’s public administration, former general inspector Leandros Rakintzis, who held the post for 11 straight years, reiterated to “N” that the Greek state is “larger” than is necessary.
“The state sector cannot assume the role of shipper, merchant, energy producer, builder … The state must restrict its duties as an imperium, entering the private sector sphere, which operates as a fiscus, only when there is no other choice,” he characteristically said.
