Growth needs opportunities

We might as well accept it; the economy this year is going to grow at a slower pace than last year and even more slowly in 2005. Spending on Olympic projects, strong demand thanks to consumer loans, public sector hirings and any other favorable circumstances do not suffice to propel growth even faster. The direct result will be that employment growth will be subdued and the country’s fiscal performance will weaken, as slower economic growth means smaller public revenues and larger deficits as a percentage of GDP. This is the «half-empty» view; in the more optimistic version, such a situation may also be an opportunity. The big challenge the new government is facing is to change the trend of simply managing the crisis. The planned taxation reform and the appropriate setting of investment incentives are crucial initiatives as long as they do not evaporate into declarations of good intentions. On the other hand, one has to admit that policy measures are not the only prerequisite of higher growth rates; an appropriate business mentality is also necessary. A Greek-American restauranteur, recently here, has an unbeatable rationale: he aims to sell takeout food cheaper than it would cost the buyer to prepare it himself. The challenge is for government measures to help businesses operate in this way – by sensing customers’ needs. And this is not possible without doing away with the huge maze of laws and regulations, apparently logical, which actually neutralize such opportunities.