German prejudice reloaded: “Feta Cheese, Olives & Retsina are not enough for economic growth”

I’ve been wondering whether I should start with the comment or the news. But the title has it all. “With feta cheese, olives and retsina, the Greek economy cannot come off the ground,” writes professor Alexander Kritikos. The academic – Greek by name  – is Research Director at the German Institute Economic Research ( DIW) Berlin , professor of economics at the University of Potsdam and Research Fellow at IZA.

Professor Kritikos claims that the main Greek export items “feta cheese, olives and retsina” but also the tourism industry are not enough reasons to justify Greece’s survival in the euro zone.

“Research and Innovation with state funding” are the key words proposed by Professor Kritikos for a a debt-ridden country and entrepreneurship environment that are falling apart due to lack of investment liquidity and huge bureaucracy.

“Feta cheese and olives are not enough” by Alexander Kritikos published in German economy daily Handelsblatt.

The year 2013 was a disaster for the Greek economy. A vision of where the country will be in ten years is missing. An emphasis must be placed on research and development.

With feta cheese and retsina , the Greek economy does not come off the ground.

Greece’s economic development was in 2013 again disastrous : the gross domestic product (GDP ) fell by another 4.2 percent. At the same time the discussion about Greece remaining in the euro area is managed very one-sided in Germany . It is reduced mostly to a ” it’s better for Germany if Greece remains there” or whether “it gets out”. No wonder, when it is also speculated again on the third bailout package for Greece. That is why it is time to discuss the conditions under which remaining in the euro area seem to make sense for the country itself and for Europe.

Greece shares  -compared with countries of similar population size – a currency area together with Finland, Belgium or the Netherlands. These countries ( France and Germany as well) have one thing in common : they invest for a long time about three percent of its GDP in research and development, and thus in their innovation systems. What is almost more important : There is a political consensus that these investments are untouchable , no matter what government rules the country. Result of the investments : these countries are in permanent evolution economically. Greece is not.”

Even the Troika demanded structural reforms will not help Greece to economical growth.

“The country is faced with the decision to take this course and greatly expand its innovation system. Result from this in the medium term innovative industries with high added value, it has the chance to sustainable economic growth. An investment strategy in this direction , and Greece remaining in the euro would be for all beneficial. But if Greece’s specialization continues to focus on olives, retsina and [hotel] bed-mountains, then the membership in the euro zone is difficult to argue with,  – except they all agree that the country should hang for an indefinite time in the EU’s drip in order not to endanger the further European integration . (full article Handelsblatt in German)

In his ground argument Professor Kritikos might be right. But what kind of production country is Greece? Can it mutate from a service offering production line to the Silicon Valley of  Europe?

No, it can’t because the Americans would not allow it. Neither Germany would allow it, because Greece’s destiny is to mutate into a country with cheap labor craft who will produce cheap products. And, No, Greece is not in that particular junction right now. The bright young Greeks are fleeing the country and the government does not even lower the price of heating oil to avoid endangering the primary surplus through oil imports. No, the Greece we know never plans in advance. It can have no vision. Because actually is struggling with the Troika’s demands.

The “Greece” Prof Kritikos is dreaming of has nothing to do with the real Greek world. But, nice try! 🙂

PS I don’t even bother to comment on the good old German prejudice of “Feta, Olives and Retsina” famous among the German tourists of the 60’s and 70’s. Sad. Then Prof Kritikos is not even 50….

KTG might invite him to some Agiorgitiko and Xynomavro wines and salad with first quality olive oil. Yes, the products that gain points around in the export world.