ECONOMY

More news coming in September

With the government now focused on the major event of the Olympic Games, Greek business is now resting its expectations on the prime minister’s traditional economic policy keynote speech at the Thessaloniki International Fair in September. It is anxious to see the government take decisive action to maintain the economy’s present high growth rates after the completion of a large number of major projects and avoid the negative impact of the high fiscal deficit and public debt. Top priority is to be ascribed to bolstering productivity and competitiveness, with specific measures that will gradually attract large amounts of foreign direct investment. According to the prevailing international trends, such a policy revolves around three main axes. First, privatizations, in which Greece is lagging behind and which are considered necessary for raising productivity in key sectors such as telecoms, transport and banking through increasing investment and introducing new technologies for research and innovation. Second, tax cuts: Most businesses would like to see a bold reduction in the current tax burden, preferably following the Irish model. Greece’s current 35 percent rate seems years away from Ireland’s 15 percent, but a generous cut is thought to be more urgent as some of the new EU members, Poland, the Czech Republic and Slovakia, are already moving in that direction. Third, education: Employers’ organizations feel that extensive reform is needed to produce the required know-how, specialization and innovation. Without such an adaptation to new technologies, Greece is seen as being at risk of losing further ground in the global division of labor.