Greece needs to have a smaller and less bureaucratic public administration and introduce measures to combat corruption and increase competitiveness. Many of these reforms are included in the list of conditions imposed by the country's lenders to grant new loans. Much like the first two support programmes, the third agreement gives greater weight to austerity measures than to large scale investment.
Having large investments is really the best thing that could happen to Greece.
First of all, thousands of new jobs will be created from new investments. New jobs will lead to a lower unemployment rate, especially in the age group of 18-29. As a result, the money will go right into the local economy and it will help many shop owners overcome their financial problems.
Secondly, with new investments, Greece will have the opportunity to upgrade its public facilities and also to make new ones, more citizen-friendly and more efficient.
Last but not least, many shop owners will be relieved financially because more unemployed people will get jobs, so they will have more money to spend. In that way that will help to restore the really low-income and fix the unemployment ratio.
On the other hand, Greece is facing, once again, a big problem. The big problem of self-destruction. By self-destruction I mean the problem of turning the money from investments into actual work and of course having enough time to absorb the investments funds.
The international studies focusing on so-called fiscal multipliers have made it possible to assess the impact of government spending on growth. The data demonstrated that government investment has by far the best developmental results. The yield for each euro invested the state ranges between 1.3 and 1.8 euros.
In conclusion, the Greek government needs to address the problems discussed above, and the members of the European Union need to understand the situation and help Greece overcome the crisis by providing and supporting large investments and by shifting way from needless austerity measures. That would actually help the economic crisis in Europe more broadly and it would give Greece the right tools for surviving this deep economic crisis.