GREEK FOREIGN TRADE AND FINANCE: The Mixed Blessings of Economic Dependence

GREEK FOREIGN TRADE AND FINANCE:

The Mixed Blessings of Economic Dependence

BOOK LAUNCH- ATHENS October 6, 2025

Statement by Constantine Michalopoulos

Let me first thank ELIAMEP for organizing this meeting and the previous speakers for their good words and useful comments about the book.

A few words about the title which caused problems for some: The book makes it clear that economic dependence in the case of Greece had little to do with the ‘dependencia’ discussion related to the colonial relationship of developing countries with the West. Still, for the bulk of the period, until the link with the European Community, the relationship was one of dependence rather than integration.

One point about the past: History says that when there is dependence from many big powers and they are quarreling with each other, the dependent country faces big problems. We witnessed this following the Crimean war and also after World War II. At present, Greece, a part of Europe, has a continuing military dependence on the US, and the US has a number of quarrels with Europe. I do not believe that these troubles are serious enough to pose difficulties for future Greek- US relations.

Greece’s integration in Europe helps a great deal on trade issues. Imagine Greece outside the European Union facing Trump and his tariffs. Ten years ago there were many voices which proposed that Greece leave the Union. Over time, slowly, these voices went silent and now Trump has made all of us become more European.

Of course, Europe must change to meet the emerging global challenges and Greece must also change with it.

In the last two years, two major studies have been prepared that propose major reforms to the European system: Enrico Letta’s Much More than a Market and Mario Draghi’s The Future of European Competitiveness. And in Greece there are the proposals by Pisaridis and many suggestions by the speakers on the panel. A lot needs to be done. Today I limit myself to three issues.

1.     In commerce, we must look forward to liberalizing trade in services, which continue to suffer from many restrictions, both domestically and internationally.

2.     On the monetary union we must admit that the asymmetric treatment of countries in surplus and countries in deficit will continue. This means that we must be very careful about managing public finance. In this connection it will be interesting to watch how Europe deals with France’s problems. The latter has some indicators similar to those of Greece just before the crisis.

3.     In Greece, we must raise the amounts devoted to investment, in health, in education, in climate, in tourism—in general in sectors that raise productivity. Draghi recommends raising the rate of investment to 25% of GDP. Greece at present is at 15%. Can we raise it? I do not know. We had reached 25% in the decade of the 1960’s but when the government recently got some more revenue, it decided to invest it in tax cuts that will win it some more votes.

In the past, Europe introduced reforms when it was in crisis. There is no doubt that we are going through a serious crisis at present. We have started a lot of initiatives in the defense sector. Last week the Economist magazine claimed that have delayed action in this matter and that Europe is suffering from an ‘urgency deficit’- that we do not realize how urgently the reforms are needed. I hope that we will prove the Economist wrong and that Europe will continue these reforms and others in other areas and that Greece will actively participate in them. As Loukas Tsoukalis on the panel has written: There is no other option

Thank you.