ECONOMY

Urgent moves to bolster cash flow in the market

The government intends to get serious about boosting liquidity in the market, as, following Thursday?s announcement by the deputy development minister that the state will pay most of the value-added tax returns owed to businesses within the year, on Friday his superior, Costis Hatzidakis, announced a number of steps to help improve the economy?s cash flow.

After meeting with the head of the Central Union of Greek Chambers (KEEE), Constantinos Michalos, the development minister stated that ?we can?t work miracles as far as the liquidity problem is concerned, but we can take substantial steps.?

Hatzidakis explained that the steps to be taken include targeted interventions in the investment incentives law, expected to have been made by the end of the summer, the simplification of procedures for the National Strategic Reference Framework so that it becomes more enterprise-friendly, and the activation of the National Fund for Entrepreneurship and Development (ETEAN).

The minister said that discussions with the European Commission to provide incentives to attract foreign investors who respect the local labor system are progressing.

The meeting with Michalos focused on so-called Special Economic Zones, which Hatzidakis said is an issue for discussion with the European Union. The talks will not be easy, he said, as the special tax status to apply there will constitute a comparative advantage for the country. ?With these zones, we are not asking for money from our peers, but to get the chance to attract investment that respects the labor system. We need to get out of the deep swamp of recession,? he said.

Michalos proposed the creation of a special policing squad to focus on rooting out illegal trade practices. Hatzidakis said the proposal will be examined, adding that ?there are legal provisions [to deal with illegal trade] but they have not produced the desired results.?

Michalos further suggested that creating an executive team of experts to apply the various structural reforms might be a good idea, as it would have an instant impact on the business climate.