N. Androulakis: Goals of social and economic resilience

The President of PASOK and the Movement for Change, Nikos Androulakis, in an article in the newspaper “I Kathimerini tis Kyriakis”, emphasizes the need for proper recovery of the Recovery Fund, in order to strengthen the resilience and competitiveness of the economy, but also the need for a fairer society.

Mr. Androulakis notes that the inability to deal with the ongoing crises intensifies the citizens’ sense of insecurity, making the need for a change of course imperative. “The government has made the fourth largest fiscal expansion in the world as a percentage of GDP, spending 25% of national income, without the expected results.” It states categorically.

While debt, on the other hand, remains the highest in the Eurozone, the trade deficit has soared, and the competitiveness of the economy remains low. At the same time, at a time when accuracy and the energy crisis are hitting our most vulnerable fellow citizens, the government has run out of fuel, leaving them virtually unprotected.

The President of PASOK – Movement for Change, highlights the consequences of the absence of a long-term plan, where by setting resilience goals and using effective tools, such as the Recovery Fund, we will achieve the shielding of our economy.

Specifically, in the energy sector, Mr. Androulakis points out the importance of substantial investments in the network, which will allow the expansion of RES, ensuring energy stability and the independence of our economy from fossil fuels. Including very expensive and imported gas and they will take us out of the isolation we are in at the moment.

In addition, with regulatory interventions such as the use of long-term contracts, as is the case in most countries but also with a ceiling on the adjustment clause, the cost of the energy crisis will be borne not only by the state and consumers but also by large producers. stay unharmed.

It also emphasizes the need for investment in the health sector, especially in primary health care and in the welfare state. Investments aimed at policies aimed at empowering young people and tackling demographics. For example, the construction of houses, which will be rented at a low price, as is the case in Portugal, to address the high cost of living.

The following is the full article by Mr. Androulakis, President of PASOK – Movement for Change in Kathimerini on Sunday:

With the pandemic not coming full circle, the energy crisis and punctuality add to a number of challenges we have to face. The inability to adapt to the constant crises, intensifies the feeling of insecurity, making it clear that a change of course is needed.

In the two years 2020-2021, the total value of interventions to address the pandemic by the government amounted to 43.3 billion euros, making it the fourth largest fiscal expansion in the world as a percentage of GDP. However, the effectiveness of the measures, due to their horizontal nature, was not the same. We spent about 25% of national income, but we have a worse quality GDP. State aid is not automatically new wealth, but it is an additional debt. The spectacular increase in deposits did not come from the growth of the economy, as the government triumphs creating illusions, but is mainly due to the deferred consumption of households due to lockdown, and the liquidity channeled by the state.

As a result, debt remains the highest in the Eurozone, the trade deficit soared and the competitiveness of the economy remains low.

This policy also has side effects. As we face the energy crisis, the government has recalled that there is no money tree, something it has been unaware of in the past, and has run out of fuel, leaving the most vulnerable largely unprotected.

Unfortunately, even now, after so many years of crisis, fragmentation and the absence of long-term policies prevail. Therefore, it is necessary to make the most of the means at our disposal, in order to shield our economy, setting goals of resilience.

The Recovery Fund is a powerful tool, with resources of 32 billion for Greece, which should be utilized effectively, targeted and meritocratic, away from bad practices of the past, based on a comprehensive plan for a sustainable development model.

Protecting our economy from energy crises and our smooth decoupling from fossil fuels is a priority.

The country’s electricity grid is suffering. In many areas it has reached the limits of its capacity, preventing the entry of new energy communities producing RES. Its interconnection remains at a very low level, both in terms of the Aegean islands and cross-border. All of the above have financial consequences, which citizens see as tangible in the electricity bill, in the charges for utilities.

Nevertheless, the network interventions included in the National Plan for Recovery and Sustainability are limited in relation to the needs. Only 195 million are earmarked for interconnecting the islands, 100 million for enhancing resilience, and another 12 million to increase its capacity by 800 MW. There is no provision for extending interconnection with the rest of Europe, thus prolonging our energy isolation. However, our country must proceed immediately with the necessary investments, so that we are ready to take advantage of the benefits of the European Energy Union.

Depoliticization, which is implemented without a plan to address the social consequences in Western Macedonia and Megalopolis, does not mean carbonization at the same time. We are the only Member State that increased its dependence on gas during the energy crisis. On the contrary, Germany, for example, which since 2011 has been implementing a program to withdraw its nuclear power plants, has focused on RES, with the participation of natural gas remaining stable.

Apart from investments, however, we must also look at market regulation issues, which have no budgetary costs but have tangible benefits for citizens. Greece is consistently among the most expensive countries in Europe in the wholesale price of electricity, due to oligopolistic distortions. In most EU countries, most of the energy consumed is sold on the basis of long-term contracts, offering price stability. In Greece this percentage is zero, with 100% of the energy being sold daily on the stock market while in Germany and France the corresponding percentage is 29% and in Italy only 11%. At the same time, the costs of the crisis cannot be borne only by consumers and the state. It should also be distributed to large producers. It is also necessary to include a ceiling from the Energy Regulatory Authority (RAE) in the famous adjustment clause, so that the consumer knows the maximum and the minimum estimated amount that he is required to pay.

It is also socially necessary to increase the resilience of the welfare state, as the pandemic has shown the limits of public health services. In our country, private spending on care amounts to 35.2%, ranking us third in the EU. The main goal is to strengthen the NSS in general and Primary Health Care in particular. However, while neighboring Italy provides about 10% of the funds from the Recovery Fund to strengthen public health, the Greek plan provides for only 4.5%.

In addition, in a country where demographics are declining and inequalities are widening after 10 years of crisis, the problem of rising rents will have dramatic consequences, especially for young people. According to Eurostat data for 2019, 83.2% of tenants paid more than 40% of their income for living expenses, while the EU average does not exceed 25%.

The deviation of our country from other Member States is chaotic. Other countries with similar problems, such as Germany and Portugal, are using part of the Fund’s resources to finance housing policies, with Portugal building 26,000 low-cost housing for rent. In the Greek plan, on the contrary, the only thing that is foreseen is the completion of the renovation program of just 100 apartments in Athens and Thessaloniki.

The above examples are part of strategic priorities that, together with key regulatory interventions in the market, constitute our social democratic proposal, to solve chronic malfunctions and to make Greek society fairer and the economy more competitive. This opportunity must not be missed.

We do not know when Greece, in such a short period of time, will have at its disposal funds over 70 billion euros from the Recovery Fund, the European Structural Funds and the Common Agricultural Policy. The centralized way the government plans to utilize these resources is likely to lead to a new executive failure.