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Victoria Mindova

At a time when Greece is trying to find its new face and the political system obviously is finding it hard to cope with the challenges of the economic crisis there are many voices heard. Some call the government to surrender, others call for mobilization and third just do not know what they want, but they do not like the life they ​​live. Whatever the motives of anyone chanting today in turning Greece, the only truth remains that the change will not come if there is no specific plan first and second, if it is not implemented exactly in the way it is made.

For the moment, Greece's plan for emerging from the crisis is the Memorandum of financial support, which is most likely to fail, because it seems too difficult to the government. However, fiscal consolidation and structural reforms are the only way for getting the Greeks out of this situation. They are at the core and the essence of the contract for financial support.

Beside the majority of European leaders, the International Monetary Fund and many economists the Harvard Professor of Economic Development Ricardo Hausmann shares this view too. He spoke in Athens this week on Greece and the secret of sustained economic growth. It is clear that even if Greece makes its foreign debt zero tomorrow, it will still have a budget deficit of around 20 billion euros, or about 10% of the GDP, which can not be serviced because the country has no access to capital markets. There is no way to go without fiscal adjustments. This is the situation. Now we must find a way to boost the economic growth in a period of fiscal consolidation.

Ricardo Hausmann excludes the option Greece to return to positive economic growth by stimulating domestic consumption. The well-known Keynesian theory, which is the base even of the economic program of Andonis Samaras, the leader of the opposition New Democracy, has no future in the modern reality of Greece. The country missed the period of cheap lending between 2000 and 2008, when it could afford a corporate tax of 15% and now it is time for more realistic solutions. Forget Keynes. He is in your past, the economist addressed the Greek business elite. Your greater consumption led you to greater borrowing and the outcome of this cycle is the huge foreign debt. It is time to bring consumption below the level of the GDP for the country to begin to form primary budget surpluses.

Currently, Greece has to focus on how to accumulate fresh funds in the period of fiscal consolidation. This obviously can not happen by trying to attract new foreign investment with the constantly changing tax system that is still seeking its final form. So, the only way to flow fresh money into the country, not in the form of a loan, is to increase the volume of tourism and exports. Tourism in Greece is a key sector for the economy, but it is not large enough to compensate for the gaps in the budget and the need for more revenue. It still has great potential for development, but the state should create the necessary prerequisites and facilitate trade, which this time should be in favour of exports to imports, unlike the previous decade.

Meanwhile, Greece should turn to the production and export of goods with high added value and technological innovations, which in most cases are produced mainly by developed countries. If the country is able to make a product of this type equal in quality, it would be more competitive than its rival, produced in technologically advanced countries, because labour costs would be lower. It does not make sense Greece to give additional money to manufacturing and exporting fields, as in textiles and clothing, which are occupied by countries such as China, India or Singapore. The country could gain significant advantage in machine building, cement industry and light industry, which have large growth opportunities.

We should be aware that rich countries with strong exports never export only one thing or a limited group of goods. They diversify, which is the secret of their success, says the Harvard Professor. From this perspective, Greece should be oriented to the traditional sectors of production of the country and how their products are quoted on the world market. If there is a gap between what has been produced so far and the demand worldwide and mainly to the export targeted countries, then the local business should seek the nearby product, in which it would make a minimum investment, but there would be a market demand for it.

Initiative awakening is the foundation of any success, believes Ricardo Hausmann and from this position, he prompted that crises help. Peaceful life and security make people lazy and, according to him, the active part of the Greek population has suffered from exactly that in recent years. Thus, without saying it exactly, the Professor made it clear that any temporary return of Greece to the drachma could activate the innovative thinking in the country. "It would be best to discuss the issue during the weekends while drinking a cup of coffee and when capital markets are closed," said he pointedly on the question of the effect of Greece’s leaving the euro area.