ECONOMY

EBEA wants new economic policy mix to tackle fiscal and growth obstacles

Greece’s unenviable fiscal situation and competitiveness is reversible, provided the government goes urgently for a new mix of economic policy, the Athens Chamber of Commerce and Industry (EBEA) has told Prime Minister Costas Karamanlis and other political party leaders in a memorandum. In the memorandum, submitted in view of the prime minister’s keynote economic policy speech at the Thessaloniki International Fair, which opens on Friday, EBEA’s chairman, Drakoulis Fountoukakos, notes that Greece will have at its disposal in the next five years about 30 billion euros in national and European Union investment resources, which, with the appropriate policies, can maintain, if not accelerate, the country’s economic growth rate. «If this money is properly utilized and the government implements its pledges for the financing of projects through private and public partnerships, it can attract a further 5-7 million euros from private sources,» EBEA says. The new economic policy mix, according to EBEA, will have to contain the following elements: – The definitive abolition of «creative» public accounting, which has been giving a false picture of deficit and debt in recent years; – A three-year fiscal readjustment program, which would envisage annual reductions of 5 percent in public spending and 10 percent in the number of public servants, aimed at containing public deficit and debt; – The introduction of a simple, stable and fair taxation system that would include a drastic reduction in the total – not just the distributed – profits of companies from 35 percent to 25 percent; – A new investment incentives law that would do away with the creation of jobs as a main prerequisite for subsidies, and would place more emphasis on innovation and the creation of large enterprises, but which would also provide new possibilities for small and medium-size enterprises; – The privatization of all public enterprises included in the government’s program in the next two years, and the merger or abolition of state agencies with a view to promoting efficiency; – The utilization of Olympic installations on the basis of private economic criteria in order to minimize their maintenance costs. EBEA notes that most sports installations of past Olympiads continue to be lossmaking and require large amounts of state subsidies; – A new institutional framework for the assignment of public projects and procurement that would establish fair competition rules for private enterprises; – The urgent opening up of the labor market and «closed» vocational shops, and special policies to limit the cost of overtime work in Greece, which is among the highest in the EU; and – The opening up of the closed energy and transportation markets, as envisaged in the government’s program, over the next two years, and the deregulation of tertiary education. «Instead of being a champion in the exportation of young students, Greece could emerge as a champion in importing students from around the world, particularly from neighboring countries,» says EBEA, adding that the government should also go for the full liberalization of private primary and secondary school fees. «No one forces anyone to opt to send their children to private schools and, therefore, the State should not raise obstacles to the continuous development and improvement of the services and installations of private schools.» The particular measures which EBEA advocates for the promotion of the above goals include an overhaul of the way public servants are evaluated, the introduction of modern and transparent administration models in all public organizations, particularly in health and social security, the abolition of all market policing regulations, and the modernization of the country’s 84-year-old basic company law.