ECONOMY

A greater role for free market

Newly appointed Economy and Finance Minister Nikos Christodoulakis said yesterday that the government’s recipe for growth will revolve around three axes: privatization, competitiveness-enhancing measures and market deregulation. He said the strategy also entails the state disengaging itself from the business sector. Stressing that the State is not and cannot be a good businessman, the minister said the government’s policy is to promote privatizations and at the same time reduce its entrepreneurial role. He announced plans to speed up the privatization program, with sell-offs slated for this year to be carried out as planned while the remaining companies will be privatize by the end of 2002. Even then, disposals are not likely to stop. The privatization program will never end. It will continue and expand, Christodoulakis stressed. The State’s determination to off-load its holdings is based on the belief that the private sector can play a more effective role in the economy, create jobs, attract investments and promote competitiveness, he added. Even while public enterprises are off-loaded onto the private sector, the state plans to maintain a golden share, giving it a significant role in strategic decision-making, Christodoulakis pointed out. He also said that competitiveness-boosting measures will be implemented to help the country deal with the current global downturn and the challenges of eurozone membership and at the same time attract foreign investment. The latter is particularly important as they can cushion the country from international vagaries. He said proposals to reinforce Greek competitiveness include offering incentives to companies to encourage them to merge, completing market deregulation and accelerating the process for other sectors, namely the natural gas market, reviewing and improving the 1991 framework on privatizing public enterprises, simplifying administrative procedures and ensuring that Third Community Support Framework funds are fully utilized. On corporate mergers, the minister singled out the banking sector as one area ripe for such a move. Mergers could include acquisitions or alliances with strategic partners. Christodoulakis also outlined the new role expected to be played by public utilities and enterprises, with an international auditing firm to be appointed which will supervise the companies’ investment programs. They will also be encouraged to raise funds from privatization schemes, alliances and the launch of new products. The private sector could follow with the adoption of international accounting standards (IAS), facilitating their comparison with foreign counterparts. The minister said the goal is to make IAS mandatory from January 1, 2003, two years ahead of a European Union deadline. The minister emphasized the need for fully absorbing Third Community Support Framework funds, especially as in 2002, it will be the principal lynchpin of economic growth. Referring to the State’s economic projections in the 2002 draft budget, he said final estimates will be issued next week after a European Union finance ministers’ meeting this week. The budget will be submitted to Parliament on November 21.