An interview on ”Education reform needed in Greece” September 15, 2003


RELEVANT TODAY OCTOBER 24, 2015
By Yiannis Papadoyiannis – Kathimerini

Dr. John Psarouthakis, a US-based businessman and former professor at the University of Michigan and lecturer at MIT, says the importance of higher education and the minimal interference of government in the economy cannot be overstated. «Without effective higher education, it is very difficult for Greece to achieve economic development and social progress at rates that will accelerate its convergence with the other European Union partners,» he said in an interview with Kathimerini.

“I believe that in the past 12 years my concerns worsened and Greece tried to make up with debt what she could not do competitively—to cover her financial needs with debt instead of a growth economy” John Psarouthakis, October 24, 2015

Psarouthakis expresses concern at the frequency of changes in the Greek education system. «It is odd how easily each minister of education changes crucial elements in the education system, such as examinations or procedures for university entry.» By contrast, in Europe and the USA, where higher education is on the cutting edge of new knowledge, there is stability and ministers function and decide within given frameworks, he notes. The picture at Greek universities is even more disappointing. «In practice, universities in Greece do not have the necessary autonomy, while their structures are based on past eras, which cuts them off from society and its needs.»

The continuous «dialogue» between universities and society is a process of crucial importance. Without it, tertiary education establishments will produce scientists without the training required to work for its further progress. «The inability of higher education institutions to listen to and communicate with society intensifies problems: Graduates cannot be absorbed by the labor market while the country is losing ground in both educational level and competitiveness, holding down its growth rates and undermining convergence.
In the USA, universities are on a continuous search for the trends and requirements in society and economic life with a view to their graduates’ integration,» says Psarouthakis. Need for vigilance There are no magic solutions for reversing this situation: Drawing on international experience, the effective autonomy of educational establishments, cooperation between public and private sectors, stable structures and linking education with society are some of the initiatives that could yield results.

In today’s changing global environment, there is no room for relaxing vigilance, Psarouthakis warns. «Continuous effort and struggle is required for progress and improving conditions. Today, it is not enough to compare today’s position with yesterday’s. Progress and development are not only measured by whether Greece has, for instance, more roads or cars than in 1970, but also by its present situation in relation to other countries.» This position, he says, is not at all flattering, but what is worse is the inability of the system to adapt and keep abreast with present requirements.

Bogus privatizations Having contributed as an adviser to the implementation of the New Democracy government’s privatization program under Prime Minister Constantine Mitsotakis in the early 1990s – which caused unprecedented reactions at the time – Psarouthakis explains why the plan did not materialize. «Conditions were not ripe for the implementation of policy. The size and speed of changes gave rise to fears and insecurity among the people. We needed time to explain some things and for society to understand the benefits of privatizations, for people to realize that under a free market (under supervision) they will have better products and services at lower cost.»

Psarouthakis now sees the main elements of the economic policy in which he participated being applied by the party that fought against it. «My sense is that the the Socialist government is pursuing privatizations with a ‘cold heart.’ They cannot do otherwise. They are following a policy they do not believe in. It is very difficult to obtain results from something you do not believe in yourself. The initiatives being attempted are timid and ineffectual, as most public utilities remain under government control.

When the government, for instance, sells 20 percent of a public company to one or more investors or by floating its shares on the stock market but retains majority control, this is not privatization. The moves being made are particularly slow since time is short. «Why is it that a country like Greece cannot attract foreign direct investment?» «Greece is too small and very regulated, government controlled a market to attract investment for itself,» Psarouthakis explains. «And because the size of the market is limited, there must be an outward-looking mentality and strategy toward larger markets, with pragmatic not ideologically determined regulations, so as to attract investment from enterprises with good prospects in Greece and other European countries.

The country’s position in the Balkans, for instance, is a prospect which could be tapped much more energetically. Greek enterprises do not seem to understand the changes taking place and the need to function on the basis of a growth strategy.

I fear that the State’s close embrace of the economy has created extensive distortions and problems.» Less government «The percentage of the public sector’s participation in Greece’s economy is too large, not just in comparison with the USA but also with Europe. If bold initiatives are not undertaken to liberate the forces of the private market – guided by effective laws and regulations – the effort for speedy economic development will be an extremely difficult affair.»