ECONOMY

Industrialists say state is the biggest obstacle to businesses

The chairman of the Federation of Greek Industries (SEV) called on the government to create a new strategy for Greece’s economic and social development, with a business-friendly strategy at its heart. «The difficult decisions over reforms that will render Greece friendlier to entrepreneurship cannot be further delayed,» Odysseas Kyriakopoulos told participants and invitees at SEV’s annual general meeting, held in Athens yesterday. Improve administration Kyriakopoulos called on the government to begin «to reverse the anti-business mentality that is so deep-rooted in our country» and suggested specific actions in health, research and development, fiscal management and the operation of public administration.» Kyriakopoulos was especially critical of the public administration which, he said, was plagued by «a multiplicity of laws, lack of transparency, low productivity, unexpected changes in rules and regulations, high operating costs, delays, constant postponement of decisions and corruption.» «The public sector burdens and supplants private activity and through bureaucracy, which increases costs and deprives it of funds needed for investment,» he added. If the state doesn’t learn to trust both enterprises and citizens, fails to abide by set rules and otherwise proves itself an unreliable partner, all other measures that could be taken will be insufficient to boost productivity, Kyriakopoulos said. The latter is a goal which, in an integrated European market, cannot be achieved with piecemeal solutions. Kyriakopoulos proposed declaring 2005 as a National Competitiveness Year. Cut public spending SEV’s head also expressed the business world’s concerns about even higher budget deficits and public debt. He called on the government to promise that, beginning with the 2005 budget, public spending will not grow at a faster pace than the eurozone’s average inflation. Greece’s inflation rate is about 60 percent higher than that, which means spending would increase at below-inflation levels. According to Kyriakopoulos, fiscal consolidation can be easily achieved, through a consistent policy of monitoring and cutting public spending. He called for a combination of lower primary spending, more modest cuts and well-targeted spending on social policy. Commenting on the higher budget deficits discovered by the current government, Kyriakopoulos said that these had been known to businesses, through the state’s desperate «tax hunts» and delays in returning VAT to exporters. Education reform The SEV chairman said that boosting entrepreneurship was closely related to education policies. Business culture should be supported in school and continue to receive support at university level, he said. Private education should be expanded and liberalized, but assessment procedures should operate at all levels of private and public education. Kyriakopoulos proposed the Austrian model of university reform as an example to follow. Austria turned its universities into independent legal entities in January and now they are responsible for adopting their own specific growth strategy. Entrepreneurship should become a value shared by the whole of society and «successful entrepreneurs should be recognized by the state and presented as examples to follow, just like those who contribute to public affairs, artists and sports champions.» Improving the quality of education and professional training would also help create more jobs. SEV’s priorities SEV’s Director-General Ioannis Drapaniotis said the federation would focus on the deregulation of the energy markets, especially natural gas, where severe delays have been encountered; better incentives for investment through a revised development law; and tax reform. «The state’s insistence on connecting subsidies to the rise in employment, the imposition of long-term commitments to prospective investors and the lack of targeted aid to sectors with the biggest needs are not compatible with the current changes in technology and competition,» Drapaniotis said, commenting on the existing development law. He also told the SEV members that the federation will pursue a dialogue with the government on tax reform, seeking a simpler law and a system that will be trusted by taxpayers. SEV will also play a more active law in planning the distribution of EU funds, he added.