New economic model will help Greece tackle growing competition

The need for Greece to adopt a new economic model in the 21st century is of top importance as the economy faces the danger of being sidelined and remaining a spectator to developments in the European Union (EU) market, sources say. Foreign investments and a large amount of capital spending are heading toward the European Union’s promising new members, while inflows aimed at Greek direct investments have been drying up over the last two years. Ten new countries will join the European Union in May, bringing the total number to 25 and raising the demand for EU funds aimed at improving each member’s infrastructure. Had it not been for large inflows related to EU funds, the local economy would have already undergone a large shock with obvious effects appearing in jobs and income levels. The second warning signal is coming from talks being held over the Fourth Community Support Framework (CSFIV). Greece is unlikely to obtain even half the funds it received from CSFIII, which totaled about 50 billion euros over the 2000 to 2006 period. Market experts say that the secret for Greece lies in the country finding its own economic model and supporting growth in specialized international services. In the area of tourism, Greece could offer services to a broader market, starting with the neighboring Balkans, which consist of a potential market reaching 50 million people. Only in this way can it take full advantage of the funds from CSFIV after 2006. Politicians and business leaders must realize that given the current rate of globalization, the market must free itself from its geographical position. The solution is in outward-looking policies, innovativeness and specialization in order to create better competitive advantages.