Keeping an eye on Greek economic policy is relevant for two reasons. Firstly because France, from its citizens to its political class, is not interested in the issue of public finances other than verbally and could, in a few years, experience the unenviable fate that befell the Hellenic Republic. between 2008 and 2015. We remember. Due to profound laxity in the management of its public accounts, accounting cover-ups and then the arrival in power of the left of Alexis Tsipras and its unreasonable program – less than that of the New Popular Front, but it is not difficult -, Greece had lost the confidence of its creditors, which had caused the interest rates on its public debt to soar and precipitated the country into insolvency.
The questions that arose were existential: with what money to pay civil servants? Pensions? How to reimburse medicines at the end of the month? Fortunately, the European Central Bank, the European Commission and the IMF, hated in Athens, intervened to put the Greek debt back on the path to liquidity and help restructure the banking system.
Public finances in primary surplus
After ten years of efforts, fiscal rigor and tightening the screws on public spending, the country is solvent again. To put it bluntly, Greece’s results are even spectacular. The country’s budget deficit is around 1% of GDP, much less than France, Italy or Spain. More importantly: Greece is generating a primary surplus in its public finances. In other words, excluding interest on the debt, the budget is in surplus. As a result, the ratio of public debt to GDP is still high – 160% of GDP – but it is falling rapidly. The economy is growing. And even if per capita income is still below its pre-crisis level, the Greeks can look to the future with confidence. Bravo to them.
The second reason why France, so troubled at the moment, should analyze what is happening in Greece, is linked to the policy led by Prime Minister Kyriakos Mitsotakis, of the conservative New Democracy party. This could serve as a fertile inspiration for the French center and right, structurally lacking in ideas. Since July 1, companies whose activity requires continuous work twenty-four hours a day have the right to offer their employees a six-day working week, or 48 hours per week, with a 40% increase in pay for time beyond forty hours. A simple law, economically, financially and socially intelligent.
The more you work, the less you cost the community
This law has four qualities. First, it increases the country’s growth potential. It is necessary to say and repeat this granite truth: the only sources of a nation’s prosperity are the quantity and quality of work – which includes the number of hours worked, the skills of workers and the quality of management – and technical progress, that is to say the way in which companies and the public sector use innovations to be more productive. But this productivity unfortunately does not fall from the sky, so much so that one can affirm that all individual wealth, as collective, comes from work.
Second, freeing up the capacity to work is the healthiest and simplest way to improve public finances by mechanically increasing the tax and social base. The more you work, the more you bring to the community, and the less you cost.
Third, in countries where the fertility rate is below 2 – which is insufficient to stabilise the population – and which, at the same time, are closed to immigration, working more is a way of warding off demographic decline.
Fourthly, this law does not constitute an obligation to work more but an opportunity, accompanied by a strong financial incentive. What could be better, socially, than to offer anyone who wants to get rich? Those who give more must receive much more. This is a good message to send to societies that are looking for clear benchmarks.
Nicolas Bouzou, economist and essayist, is director of the consulting firm Astères
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