ECONOMY

Fiscal situation and bolstering entrepreneurship among top priorities

Cost factors will be prominent in the evaluation of what has to be done as soon as New Democracy takes office. The public purse is in dire straits; accounts are in disorder; contractors have stopped working, waiting for extra reimbursements; investment plans and European Union subsidies are frozen. In some ministries, in particular, the new heads will have to work like those troubleshooter-chief executives hired when a crisis of confidence breaks out among creditors. The European Commission’s recent opinion on Greece’s updated Stability and Growth Program includes important comments, which, due to the pre-election climate, did not receive the appropriate attention. «Greece has postponed for yet one more year the effort toward limiting its fiscal imbalances,» note the rapporteurs. «The rigidity and high level of the state deficit are a serious source of concern, particularly as regards the accounts of the social security system.» Because the Greek government did not present an analysis of the long-term stability of public finances – despite the insistence of the Commission and a previous commitment by the Economy Ministry – «there are dangers of destabilization of public finances,» Brussels said. The way PASOK’s new leader, George Papandreou, announced almost a doubling in farmers’ pensions last week was proof of irresponsible tactics. Mr Papandreou «forgot» to consult the Finance Ministry; had he done so, he might have found out that it is impossible to overcome the already heavy burden of 1 billion euros which the financing of such pensions costs. The second big priority, which is difficult to attend to in the short run but on which not even one month must be lost, concerns the change in business climate and the promotion of measures to bolster entrepreneurial incentives. But it is important to consolidate confidence in the prospects of the economy for yet another reason: The high inflation levels, and the general pressure under which the family budget has been for some time now, could easily lead to a sudden downturn in consumption. And if the new government makes the mistake of exaggerating the situation it has inherited, it is quite easy for a climate of pessimism – rather than of tidying up and rehabilitation – to set in. High priority must also be given to the initial economic policy measures. The new government must give its coordinates without delays, generalities or ambiguities. By tapping the stability of the environment which the common currency and the single market offer, it has to send out a sturdy message of defense of the economy’s most important sector – the one that makes and sells internationally competitive products. In the same spirit, it is important that measures for bolstering and facilitating entrepreneurship, particularly among young people and smaller companies, are announced and given speedy parliamentary consideration. The new government must capitalize on the favorable impressions it can garner at the outset of its term, when the international community sets its eyes on us with greater interest. A policy which says, «We shall record, study and announce later,» will have lost the serious advantage of creating a climate of confidence in the prospect of the economy. We should be mindful that one of the most useful aspects of the Olympic Games is the opportunity for the country to be at the center of international attention. Priorities, then, need to be clear cut.