IMF opposed to investment bank and tax-free zones

The International Monetary Fund strongly opposes plans by the Development Ministry for the creation of a Hellenic Investment Fund and special economic zones around the country, which is likely to delay or even cancel their implementation.

In its report on the Greek economy published on Monday, and in contrast to the wishes of Berlin, which supports both growth initiatives, the IMF says that efforts for the planning of technical growth will have to be rebuffed: “International evidence is mixed at best on the usefulness of development banks, tax-free zones, and subsidies (or tax expenditures) targeted at specific sectors. Greece cannot afford to divert resources to unproductive uses nor to devote limited implementation capacity to designing and establishing such policies. And in particular, Greece cannot afford a more complicated tax system, which would work directly against the crucial effort to improve tax collection.”

Despite IMF opposition, talks on the creation of an investment bank are continuing, particularly with German investment lender KfW, while there has been interest expressed by France and Qatar. Athens attributes the public statement of the IMF’s opposition to the fact that the project has already reached an advanced stage.