ECONOMY

Balkan nations improve prospects for EU entry

«The important thing is the journey, not the destination,» said the Economist Intelligence Unit’s regional director for Central and Eastern Europe, Laza Kekic, in summing up his presentation on the last day of the magazine’s Eighth Round Table with the Government of Greece in Athens yesterday, titled «Leadership Strategy for Security & Prosperity in an era of Uncertainty.» Opening the theme of «Southeastern Europe: A Step Toward the European Union?», Kekic said he was optimistic on the next enlargement step of the EU, stressing that the most important element in the preparation of Balkan countries in their preparation for entry is precisely to be found in the policies and reforms they are required to pursue in order to be ready. «While it is true that most of these countries remain extremely vulnerable to adversities originating in the international environment, they are, nevertheless, gradually proving that they have achieved considerable progress, as indicated by the example of Serbia and the stability it showed after the assassination of Prime Minister Zoran Djindjic,» he said. Kekic noted that the economies of these countries are showing clear signs of recovery, while a very important development is the rapid rise in foreign direct investment in the wider region, which means that investors are expressing confidence in its prospects, at a time when such investment is showing signs of decline in the rest of Europe. The business climate in the region is also showing clear signs of improvement. Despite important differences between them, said Kekic, all the countries in the region are characterized by two basic parameters: the unquenched desire to enter the European Union and the anxiety to accelerate and maintain their growth rates at satisfactory levels. «In this framework, the EU has to play a supportive role, maintaining open access to the single market.» World Bank Country Director Orsalia Kalantzopoulou said the region posed an important challenge for the World Bank, which today manages projects valued at $3 billion. The organization’s priorities for Southeastern Europe include improvements in economies of scale, the creation of free-trade zones, a reduction in poverty rates and regional integration. Greek business outlook Contributors to other themes at the conference focused on business developments and prospects. Another rapporteur, Giorgos Momferratos, partner of business consultants and auditors Ernst & Young, said 2004 is a year of optimism in the field of projects implemented through private financial initiatives. This optimism is based on a number of developments, such as the change of government, the gradual completion of Olympic projects and the increased know-how in both private and public sectors. Momferratos said a strong political will is a crucial factor in the successful promotion of projects so that the public realizes the importance of privately financed projects, in the sense of the transfer of risk from the public to the private sector. Aspis banking and insurance group CEO Pavlos Psomiadis expressed the view that the change in government signals the beginning of a new era. He said one of the most interesting features in the new period will be how Greece will utilize its abundant pool of highly qualified human resources in the post-Olympic era. «Economic policy must focus on the services sector, particularly tourism, financial services, education, shipping and, complementarily, transport,» Psomiadis said. He said it is necessary for Greek enterprises to adopt as strong an outward-looking attitude as possible, with a view to tapping the potential of the enlarged European Union’s now-open market of 450 million consumers, enhancing their know-how and further upgrading human resources. Hadjioannou Founder and president of UK-based Easygroup Stelios Hadjioannou set out his entrepreneurial philosophy, stressing that demand is the crucial factor which determines the price of the product or service which the consumer pays. Easygroup’s strategy has been to look for what the consumer wants and provide it at the lowest possible cost. Subsidiary easyJet’s success has been a source of inspiration for 54 new, low-cost air carriers that sprang up within two years, surprising even himself how much larger than he had originally anticipated this niche market was. Referring to the recent steep slide in easyJet’s share price, Hadjioannou said this was to be expected as supply increases while demand remains steady. «A company self-described as value-for-money must find ways to reduce its costs, either through innovations, technology or the Internet,» which is «the most important weapon of the modern generation,» to be used by all companies, he said. He noted that state subsidies to European airlines were unfair and distorted competition.