ECONOMY

Government wants to retain fast growth post-Olympics

The government’s main concern after the Olympics will be to maintain economic growth more or less at present levels. Despite predictions to the contrary, government officials are confident that a new impetus for growth can be provided by «mobilizing» the private sector, that is, by incentives to boost business activity. Self-financed projects are expected to play a major role in boosting activity in the construction sector, the engine of economic growth over the past four years. The self-financing model – in which private sector operators finance the public project and then operate it for an extended number of years – has already been applied to some extent in Greece: the new Athens International Airport and the Attiki Odos, the highway skirting northern Athens and linking the city to the airport, are prime examples. The government intends to extend the practice much further, to include virtually all infrastructure projects and even construction projects thought until now to be the exclusive province of the State (for example, universities and prisons). The government would also like to extend the self-financing model to projects undertaken by local authorities, although it is not so certain about transferring services to the private sector. A major program that involves transferring public property to private management concerns several Olympic venues which, after the Games, will be transferred to private-sector consortiums, via a bidding process. The consortiums will manage and develop the venues which, the State fears, could become white elephants if left to the sports federations. A company, Olympic Properties, has been set up to conduct the tenders and manage the venues’ transfer to private hands; its previous management, however, which was in place for just a few months before being replaced by the new government with its own favorites, did not come up with any study or proposal as to how the transfers are to be made. It is expected that almost all current venues will be transferred except for the main Olympic projects. This transfer to the private sector will provide new investment, create jobs and will relieve the State of significant maintenance and security costs. Indeed, the State is expected to pocket significant sums from the transfer of the venues, as well as tax revenues. The announcements about project self-financing and the management of Olympic venues are going to be part of a first wave of reforms, to be announced right after the Olympics. These will also include already announced changes in the tax code, with reduced taxes, and a simpler auditing system for companies. A second wave of reforms, likely to be postponed for spring 2005 – because the government’s priority is for Parliament to elect a new head of state by the required minimum of a three-fifths majority and thus avoid general elections – will include privatizations and the deregulation of business opening hours which, especially outside Athens, are strictly regulated by prefectures as a protectionist measure in favor of traditional retailers.