Notis Papadopoulos NOTIS PAPADOPOULOS

Magical inspiration is not enough

COMMENT

TAGS: Banking, Politics

During its going on five months in power, the conservative government of Prime Minister Kyriakos Mitsotakis has taken many positive steps to bring Greece back to normality. Some of these steps may appear self-evident today, but they would have been unthinkable during the reign of SYRIZA – a political party held hostage by ideological fixations. 

These steps include the decision to overturn the so-called asylum law that made Greek universities a no-go zone for police, the actual implementation of a smoking ban in indoor public places, the promotion of public-private partnerships in municipal garbage collection, the unblocking of major privatizations and investment projects and, why not, the introduction of a single electronic pass for all national highways. 

Furthermore, the conservative administration is pushing through a series of remarkable reforms such as launching a new project to digitize Greece’s public sector together with steps to introduce electronic signatures, the abolition of permanent employment status for newly hired staff at Public Power Corporation, the reduction of value-added tax in the construction sector and the abolition of the so-called Katrougalos law (named after a previous leftist labor minister), which was devastating for the self-employed.

Investor confidence in Greece has improved (the country even managed to sell debt at negative yields) and expectations are growing that the Greek economy will grow faster.

However, for Greece to be able to bridge the gap separating it from the rest of Europe, we must all prime ourselves to succeed. First of all, the government must undertake bold initiatives that will convince foreign investors to put their money in Greece.

For example, the adoption by the Finance Ministry of a plan first introduced in Portugal, offering tax incentives to wealthy foreigners who wish to transfer their tax residence to the country, is a move in the right direction.

Above all, recovering the lost ground requires a well-functioning banking system. Greek banks are essentially inactive at the moment. No investors – and hardly any businesspeople – can rely on financing from the Greek banking sector, which is struggling under the weight of nonperforming loans – not even to service urgent current cash obligations.

Without the banks, no amount of magical inspiration on Mitsotakis’ part will be enough to spur growth.

Online