ECONOMY

Faster reforms now, says minister

The State can never be a good businessman… We will disengage it quickly from any business activity, Economy and Finance Minister Nikos Christodoulakis said yesterday at the opening of the 12th annual conference on the Greek economy held by the American-Hellenic Chamber of Commerce. The intention is not new. However, its stark formulation is indicative of how far the ruling Socialists have come since the 1980s. They did not invent the state sector, but they did a lot to let it grow and become bloated. In the past six years, the Socialist government, which has governed during all but four of the past 20 years, is taking steps to undo the damage its previous incarnations did. Christodoulakis said the reform will not be carried by the State alone. I call on all of you to respond to the challenge of creating an economically strong Greece, Christodoulakis told his lunchtime audience, largely comprising businessmen. The main priorities for the government are to accelerate inflows from the European Union’s third Community Support Framework (CSF III), bring tax reform forward, pass a new development law providing incentives to enterprises and open up the energy market further. All these actions are to be implemented by the end of the first half of 2002, because, according to Christodoulakis, time is pressing. Next year, for the first time, Greece will lead all members of the Organization for Economic Cooperation and Development (OECD), including all EU states, in economic growth, at 3.8 percent of the country’s gross domestic product. This will be almost three times the eurozone’s average economic growth of 1.3 to 1.5 percent. Christodoulakis took pains to dispel the myth, as he called it, that Greece’s growth is purely driven by generous EU funds. CSF III, he said, contributed 1.1 to 1.2 percent to our growth; the Public Investment Program contributes as much; and the rest is domestic-driven, on a par with the other eurozone economies. Christodoulakis said that Greece was very lucky, in this period of economic slowdown, to have joined the eurozone, which it did on January 1, 2001. He said that, otherwise, the Greek drachma would have been buffeted by turbulent currency markets and would certainly be devalued. However, we must not see the eurozone merely as a defensive mechanism, but, rather, as an incentive for faster growth and faster structural reforms, he said. The goal of the new investment law would be to wean Greek enterprises off direct state subsidies by providing tax incentives instead. There will be special incentives by sector, especially focusing on tourism and agriculture. A bill on foreign investments, further liberalizing the use of private capital, will be submitted by March. Opposition leader Costas Karamanlis, the keynote speaker at yesterday’s dinner, said the government had failed to put an end to state monopolies, something he promised his conservative party would do, once in power. He accused the government of a lack of transparency in awarding public contracts and called on more aid for small and medium enterprises and a simpler taxation system.