Mr Stournaras, the Greek Minister of Finances gave an interview to the BBC yesterday. He was extremely upbeat, declaring that there was almost no chance of a Grexit occurring any more and that recovery would begin in Greece in the last quarter of this year. He spoke of optimism in the market and claimed that they had managed to turn the economy around. All very bright and beautiful.
However, Martin Koehring of The Economist Intelligence Unit isn’t convinced by the Greek finance minister’s claim that the risk of leaving the eurozone has almost vanished. Nor is he convinced by Yannis Stournaras’s argument that the Athens government has turned the economy around, as the Guardian informs us. Nor are we.
And in this debilitating disastrous mess they have made of what used to an economy in Greece there is one feature no one bothers to concern themselves with at all, neither Mr Samaras in his pipe dreams of enormous investments rolling in from abroad at his behest, nor Mr Stournaras in his cocky presumptiveness. And that is, the severe brain drain from Greece.
Educated, able, intellectual, bright young people are leaving in droves because they cannot find jobs in this austerity driven recession, or even if they do, the pay they are offered simply is not worth their while. So when recovery does start, according to Mr Stournaras’ triumphalist claim that we shall start seeing recovery towards the end of the year, who will be there to provide the necessary driving force for the economy, for the country?
After five years of continual recession that has shrunk the economy by some 20% of GDP and counting, achieving an unemployment rate forecast by some to reach the dizzy heights of 30% this year, the Stournaras prediction of a recovery really does not amount to much. Some kind of anaemic recovery is bound to appear no matter how badly the economy is being handled. And it is. Being handled badly.
However, it will be a lopsided, handicapped recovery when we have lost our most valuable resource. Our educated and qualified young people who should be in the vanguard if recovery is to lead to real growth and a stable dynamic economy. They will not be there.
Some optimists say, Oh, they will come back! But will they? Mr Samaras and Mr Stournaras are very cocky in preening themselves that they have regained lost confidence in Greece. But whose confidence are they talking about? That of fickle, unstable markets perhaps? That of self serving politicians like Angela Merkel who is only interested in getting reelected and will do whatever it takes to achieve that admirable goal? Even pretending that the Samaras Stournaras duo have turned the Greek economy around?
But what of the confidence of the Greek people that the (mis)handling of this crisis has completely demolished? By the time recovery may start showing up timidly, our best and brightest will have established themselves abroad, with good salaries and better prospects. Some will have set up permanent homes, have had children and all the trappings that make a return even more difficult.
But beyond that, what incentives will they have to return to their home country, when confidence in Greek governments has been annihilated? Who will ever think seriously again for a very long time of buying their country’s government bonds to assure their savings? Hmmmm. Who will dare for a very long time to buy a house, or build one using savings acquired from their work abroad, when they know that whatever the situation might be at the time, the first thing any Greek government will do will be to slap enormous property taxes and other taxes on them?
Who will dare to bring their saving back at all? There simply is no confidence at all. And this loss cannot be regained easily or quickly. It is the kind of doubt and cautiousness passed down from father to son, mother to daughter. It will take a generation or two to overcome, and that only if the likes of Papandreou, Samaras, Stournaras, Venizelos and the like never appear on the Greek political scene again.
With all this empty talk about regaining competitiveness, why is this aspect not even hinted at?