The key issue for Greece to be in a position to continue on its own post-August 2018, was, is, and will continue to be the increase of private investment. And for private investment to pick up, trust in the rule of law and the national government’s willingness to proceed with structural reforms, are necessary conditions.
OECD’s review shows a substantial drop in Greek productivity, which is, of course, followed by a proportional decrease in the average wage. This is mostly because Greek entrepreneurialism has for the most part been relegated to being related to hospitality and tourism, almost in its entirety.
High achievers -the growth engine of every society- in Greece, are forced to either:
- Stay home and work in a post that is significantly inferior to their skill base;
- Stay home and try to do something on their own in which case they will most probably find themselves suffocated financially due to lack of capital in the market (lack of private investment as noted earlier);
- Go abroad.
The lack of private investment and subsequent drop in productivity has resulted in 80% of taxes being paid by 20% of taxpayers. The rest are working in low-level, unproductive posts, often below the poverty line, thus not being in a position to pay any taxes at all.
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