The loyal readers of the column know the emphasis we place on the rapid reduction of public debt relative to GDP in the coming years as long as conditions remain favorable.
There are many reasons. Finance Minister Mr. Pierakkakis has referred to some of them, e.g. easing the burden on future generations. However, the main reason in our view is another. All the forecasts of the international organizations regarding Greece's demographics are not simply unfavorable. They are very unfavorable and lead to a shrinking population in the coming decades.
This means a burden on public finances as spending on pensions, health and medicines will increase. Therefore, we should reduce it as much as we can so that public finances can bear the extra burden when the time comes.
If you take a look at Eurostat's estimates for the course of each EU country's population from 2025 to 2100, you will find that Greece has one of the worst performances. From 10.3 million people in 2025 it is projected to fall to 7.2 million in 2100, i.e. a 30% decrease. Only Lithuania, Latvia and Poland are estimated to do worse than our country, as shown in the chart below.
There is no need to explain the negative consequences that such a thing will have on the labor force, on productivity in an economy and society that do not favor risk-taking, are suspicious even of healthy entrepreneurship, and generally like the status quo even though in words they criticize it. Of course, such long-term forecasts involve errors and hopefully they will be disproved for the better.