If Greece’s international creditors, the so-called troika, ultimately succeed in persuading our politicians to shrink the public sector, they will have addressed the core of the country’s problem. For the term  “private sector” in Greece is really a misnomer.

By Grigoris Nikolopoulos

Look around you, and you will find that all large Greek enterprises derive their business from the State. Around them cluster many small and midsized businesses that operate as subcontractors. Exporting companies that manage to successfully compete in the global marketplace are few. Businesspeople do not display a particular appetite for risk taking, they are not noted for their creativity, they do not invest, they are averse to competing in markets abroad.

However, as the State’s role in the economy shrinks, that of the private sector must grow. The change in the economic model which the country has long needed is ante portas. But we must bring this change about ourselves. The troika has done its bit, it has forced the political system –which put up a strong resistance- to reduce the public sector and open up closed-shops and protected markets. Now, the ball is in the businesspeople’s court, who must attain two targets: first to survive without State and borrowed money and, second, become internationally competitive, produce and export.

Let’s not have illusions. Even if the €130 billion bailout loan agreement and the haircut to Greek bonds are implemented tomorrow, there will be no money flowing into the economy. All the money that the Europeans will disburse will return to their pockets because they will only go towards repaying their loans. And the money that will go to the recapitalization of banks will not increase liquidity in the market because they will be used as paid-up capital to boost their creditworthiness. The only money that will enter the market –if at all- will be the €6 billion to pay State liabilities to the private sector. The €14 billion of European investment subsidies have probably been used as guarantees for other liabilities, so they are uncertain, too. No other money will flow into the Greek market, either borrowed or in the form of grants.

The issue is simple: we produce to export and earn our living. Otherwise, we shall have to live as beggars, waiting in vain for money from the troika which will never come.