ECONOMY

Government’s economic policy is ineffectual, says SEV chief

Odysseas Kyriakopoulos, the outspoken chairman and executive president of the Federation of Greek Industries (SEV), criticized several aspects of the government’s economic policy yesterday, mocking its anti-inflationary measures and saying privatizations are too slow. Kyriakopoulos also said that the recent rise in the stock market – over 40 percent since April 1 – had all the makings of a bubble. «Look at the top rising stocks,» he said, adding that their gains bear no relation to any change in activity or their financial results. Commenting on the government’s accelerated privatization program, Kyriakopoulos said that it was going too slowly, at a cost to the taxpayer. «Of course, Mr (Nikos) Christodoulakis (the economy and finance minister) may be satisfied relative to the goals he has set… His goal is to ensure revenue for his budget,» he said. Pointing out that most «privatizations» were actually partial sell-offs of companies in which the State retained control, Kyriakopoulos said that these are not real privatizations and that the State should «stop playing the businessman.» «SEV is not satisfied with the progress in privatizations,» he added. Kyriakopoulos agreed with Bank of Greece Governor Nicholas Garganas who said on Wednesday that Greece’s high inflation is the result of high labor costs, saying, «We do not help the Greek economy when we award pay rises above inflation.» Kyriakopoulos added that he did not call for a reduction in wages but said that SEV is «concerned» at the level of pay rises when it is impossible to measure productivity in the private sector. He added, however, that other countries had resorted to pay cuts to help improve the economy, saying that «this spirit does not exist in Greece.» SEV Vice President Nikos Analytis added the warning that the economy was losing its competitiveness because of inflation and that this could lead to more unemployment. Kyriakopoulos had raised a storm earlier this year when he said that, after next year’s Olympics and the end of the European Union’s aid through the Third Community Support Framework in 2006, Greece would not be able to sustain its current high level of economic growth and that the unemployment rate, currently just under 10 percent, would double. Ministers and unionists joined in denouncing his «bogus forecasts.» Greece’s harmonized inflation – the common measure used by the European Central Bank for all members of the eurozone – was running at an annual pace of 3.6 percent in June, compared to a eurozone average of 2 percent. Referring to the government’s announced intention to monitor prices more closely and punish «profiteers,» Kyriakopoulos said that inflation cannot be tackled with police measures, adding that free competition should be allowed to work. «Inflation is a very serious matter and must concern all of us. At present our inflation is 1.5 to 2 percentage points higher than in the rest of (the eurozone) and we have a common currency. We must all make efforts to adapt to a framework of free competition and, where competition is lacking, we must promote it,» he said. Kyriakopoulos accused tax inspectors of going into companies determined to raise a certain amount of money in fines, irrespective of whether a company had violated the law or not.