ECONOMY

Action needed, not words

Nearly two months into his job, Economy and Finance Minister Nikos Christodoulakis has yet to back up his words with action, leading industrialists said yesterday as they urged him to beef up his pro-market beliefs by stepping up the pace of structural reforms. Lefteris Antonakopoulos, president of the Federation of Greek Industries (SEV), said that initial impressions showed that the new minister possesses good intentions and that economic policy is heading in the right direction, but that these alone are not enough. We must make haste because time is not on our side, he told reporters. SEV Chairman Odysseas Kyriakopoulos said that government indecision and delays are costing Greece dearly and hurting the country’s competitiveness. One example is Greece’s slide in the Global Competitiveness Report 2001 compiled by the World Economic Forum and released in October. Greece fell to 36th place from 33rd last year in terms of growth competitiveness. The deterioration was more evident in current competitiveness, with Greece sliding 10 places to 43rd position. Kyriakopoulos said that what was more worrying was that new entrants such as Slovenia and Estonia have leapfrogged Greece in both tables. The industrialists said the problem was not restricted to the pace of structural reforms, but also include the government’s inability to come up with solutions palatable to the market and in keeping with reality. Kyriakopoulos charged that privatization terms do not respond to reality, noting that the current problems with the sale of Hellenic Shipyards to Germany’s HDW Ferrostaal could be traced to this. The problematic sell-off of debt-laden national carrier Olympic Airways is another case in point. He slammed the government for not understanding the workings of the market. The State’s failure to adopt bolder measures is nowhere more evident than in the recent batch of proposed tax incentives for corporate mergers. We should have bolder tax cuts. The proposed law should allow merging companies to write off their losses over a specific time frame. It should also permit parent companies to take over their subsidiaries, the SEV chairman suggested. Another bone of contention is the government’s delay in clearing up the piles of bureaucratic paperwork. It must simplify procedures so individuals and companies can understand the system, he insisted. The industrialists also stressed the urgency of social security reforms. Soaring costs on top of a weak economy could hurt Greece. A pioneering system for monitoring traffic, one that would be the envy of many other world capitals and which could ease many of Athens’s traffic problems, has been in operation since 1996, the work of Athens National Technical University.