For many decades, peaking in 2002, the extraction and combustion of lignite accounted for approximately 30% of the Gross Value Added (GVA) at the level of Western Macedonia. In 2014, this figure rose to 42% and, indeed, showed upward momentum for the coming years.
At first glance, and taking into account the escalating contraction of lignite activity in Western Macedonia, this finding appears to directly contradict logical expectations. Upon closer inspection, however, given that a gradual decline in the total GDP of Western Macedonia has been evident since 2009, accompanied by a parallel contraction of all productive sectors at the regional level, it becomes apparent that the lignite industry is emerging as increasingly dominant within the local economy.
The aforementioned findings, among others, emerge from the recent study by the Technical Chamber of Greece – Western Macedonia Section (TEE/TDM) entitled: Update of the study “Estimation of the cost of transition for Western Macedonia to a low lignite production regime” - Evaluation of the contribution of economic sectors to the productive model of Western Macedonia with an emphasis on the impact of the lignite industry.
Through the study, and with the aid of the Input-Output (I-O) model and the Leontief mathematical model, a comparative evaluation of the mining and power generation sector in shaping the regional GDP of Western Macedonia was undertaken. Concurrently, it mapped out the prospects of those sectors that possess the momentum to counterbalance the loss of wealth and jobs, aiming towards a generalised productive reconstruction of Western Macedonia under conditions of low lignite dependence.
According to the study's findings, the following general conclusions emerge:
- Western Macedonia entered a state of economic recession in 2006, well before the onset of the national economic crisis (2009), while the effects of the crisis exhibited milder characteristics compared to the rest of Greece. This fact is related to the high levels of monoculture centred around the Public Power Corporation (PPC) S.A. and the strong dependence of the local labour market on the lignite industry
- At the level of Western Macedonia, the employment multiplier generated by the lignite industry is particularly high. For every permanent staff position in the mines and power stations, 2.6 jobs are created and sustained within the local labour market (2013 data)
- At the Regional level, there are no dynamic productive sectors capable, at least in the foreseeable future, of cumulatively substituting for the declining lignite activity, both in terms of employment and in terms of Gross Value Added.
- From 2004 to the present, over 10,000 direct and indirect jobs have been lost in the lignite industry, whilst over the next fifteen years, 14,500 jobs will have been lost, equating to 70% of the positions that existed in 2004.
Based on the above conclusions, it is understood that unless large-scale developmental actions with a robust employment support index are immediately set in motion, severe deindustrialisation will ensue, along with the loss of the region’s energy character and a risk of destabilising the productive fabric, making it difficult for the local economy to recover.
Given these facts, the formulation of a New Deal (New Deal) for the utilisation of lignite in high value-added technologies with a low environmental footprint constitutes an overriding necessity. This must be accompanied by the initiation of a multi-year developmental strategy plan, emphasising sectors capable of acquiring dynamic characteristics regarding production, employment, and income indices, and which can spark the activation of local small and medium-scale satellite enterprises.