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Unions want economic growth but have no idea how to achieve it

16 September 2010 / 17:09:16  GRReporter
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The result of this model for getting out of the economic crisis in an optimistic scenario will only be decrease in the deficit by 2015, but the debt of the country will increase, says the Greek Economy and Employment in 2010 report of the Scientific Institute at GSEE.
A change in policy to comply with the needs of society and the need for development are necessary. This is the opinion of the team of scientists who have studied the trends in the Greek economy over the last year under the guidance of Prof. Savas Rombolis. Investments will not come if there are no well-developed networks and infrastructure, said Mr. Rombolis. A change may occur if peripheral municipalities study the status of the companies operating on their territory. Subsequently, clusters should be created to link the activities of the tourist branch to agriculture, the construction branch to tourism, etc., and to develop collaborations between companies and research institutes and education.

If we look back, the economic crisis began as a financial crisis that has become a crisis of real economy and recession, and develops into a crisis of employment and growing unemployment. The main reasons for the crisis in Greece are the unequal distribution of income, tax relief for businesses, tax evasion and the collapse of the cashing control mechanism of state revenues, the report stated. Mr. Rombolis said that according to his sources, only private companies due the amount of 15 billion from unpaid taxes for 2009 to  the state. But the Greeks must be prepared that 2011 will be the most difficult year of the transition period. Many companies will close and unemployment will grow. "The percentage of unemployed will change, but we can not estimate its value as it depends on the government policies for getting out of the crisis," stated Giannis Panagopoulos - President of GSEE.

If the country continues to rely solely on construction, tourism and maritime services, then there will be no future and it will fail to cope with the crisis, said Mr. Panagopoulos. The report proposes to assess the problem in terms of what can be done to develop the country and society, not only to try to reduce the deficit, so as to achieve a rate of development that creates jobs.

The proposal is not to reduce wages, but to reduce prices significantly. The idea is that wage cuts lead to a vicious circle with no exit for the economy since the purchasing power of the Greeks sharply drops which in turn leads to loss of hundreds thousands of jobs, which in turn leads to loss for the state in the form of contributions to social security payments and taxes. This is the interpretation of Vangelis Bousoulas - Secretary General of GSEE.

The average duration of unemployment increases, the block system for insuring and paying the people working for several employers is a rule rather than an exception. And the new acts violate labour law and trample all rights obtained to date and written down in the collective agreements, said Mr. Bousoulas.

The innovation in the report of GSEE is that it tries to integrate the issue of environmental changes and how the economy can adapt to environmentally friendly solutions. The report consists of 11 sections. The first five describe the faces and dimensions of the crisis, while the others refer to the consequences of the crisis on labour relations.

Tags: NewsEconomyEconomic crisisRecessionDeficitDevelopmentUnemployment
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