ECONOMY

Measures to boost exports after 10-pct drop in 2002

Greece has belatedly decided to take action to boost its flagging exports after statistics from the Bank of Greece showed a near 10 percent drop in sales of products abroad last year – the first in many years. Greek exports dropped by 9.6 percent last year, with sales of non-oil products down by 5.9 percent, widening the 2002 trade deficit by 1.1 billion euros to 22.71 billion euros. The waning demand for Greek products abroad has been due in part to the economic slowdown in the major EU countries, Greece’s principal trading partners. The eurozone is estimated to have grown by just 0.8 percent last year. Economists said Greece’s high inflation rate has also dampened demand for its products abroad by making them more expensive than similar products from other countries. Announcing a series of measures to boost exports, the Finance Ministry yesterday said it aims to lift the exports-to-GDP ratio by one percentage point annually over the next three years. Foreign direct investments are expected to substitute for community funds as the engine of growth in the future. EU structural funds and projects related to the 2004 Olympic Games have been responsible for Greece’s above-average growth rate over the last three years. The proposed measures will seek to improve coordination between the various exporting bodies, target new markets and assist small and medium-sized enterprises in branching out into the markets abroad, Economy and Finance Minister Nikos Christodoulakis said. «The government is allocating 40 million euros over three years to promote Greek exports,» he said. The total budget comes out at 77 million euros, including 37 million euros in community funding. The proposals provide for the setting up of a national export council to help exporting companies deal with problems. Members of the council will include government representatives, industrialists, export organizations and chambers of commerce. The Export Promotion Board will be revamped to focus on small and medium-sized enterprises. It will also coordinate its marketing efforts with companies and other bodies. The eventual goal is to merge the board with the Hellenic Center for Investment. Agencies to promote Greek exports will be set up abroad in collaboration with specialist organizations. A pilot program currently under way for 40 companies in Athens aims to facilitate their expansion into markets abroad. Proton Investment Bank economist Christos Avramides said the package of measures appears to deal with only a small part of the problem facing Greek exports. «The problem with exports is not just marketing or procedural. It reflects principally a competitiveness issue and has to do with Greece’s high inflation, which, in turn, leads to high production costs and impacts on the prices of products,» he explained. He said a more effective approach would be to set specific targets or to provide corporate tax incentives.