ECONOMY

Alogoskoufis: New investment law already producing results

The new law on investment incentives has already started producing results, Economy and Finance Minister Giorgos Alogoskoufis said yesterday. Speaking on the 9th Roundtable with the Government of Greece, an annual event organized by The Economist Conferences, Alogoskoufis said the investment law, passed last autumn, had resulted in 37 investment proposals, worth a total of 115 million euros, being submitted so far. He did not specify the number of those proposals approved, which is zero. He also stressed the government’s future privatizations. Specifically, Alogoskoufis said the government had undertaken – or, more accurately in some cases – would undertake initiatives to put the economy back in shape. These, he said, were: – The so-called audit of state finances, or, as he termed it, the «restoration of fiscal transparence and fiscal restructuring.» «In complete and close cooperation with the European Union, we restored transparency in state accounts and our economy’s credibility. By limiting excessive public spending we will bring the economy back to a state of fiscal balance by the end of 2006.» – Tax reform. «The reform of direct taxation, which cuts corporate tax by almost a third within three years, as well as individual income tax rates. Corporate tax will be cut gradually, from 35 percent in 2004 to 25 percent by 2007.» – The law on investments or, as he called it, «the new investment law on growth and regional convergence.» «This law boosts the growth of enterprises old and new, helps them modernize, promotes new technologies and innovation, takes advantage of Greece’s relative strengths and helps regional growth. The new investment law is indeed pioneering compared to all the previous ones. It is simple, easily understood by all concerned, and complete.» – The new round of privatizations, whose model is «the privatization of the National Bank and Hellenic Petroleum,» where the state still retains the right to name the board chairman and the chief executive. «Our aim is to boost competition, obtain maximum advantage for the state and ensure total transparency, In 2005, privatizations will be worth 1 percent of the GDP. Among others, we plan to reduce the state’s stake in OPAP and list the Postal Savings Bank and Athens International Airport on the stock market. Also, the tender for the sale of Olympic Airlines, one of the major woes of the past, is in progress.» – The revision and acceleration of incoming EU funds for projects aided through the Third Community Support Network. «We want to play to our particular strengths and make better use of EU funds. Already, the absorption rate has risen from 22 percent in March 2004 (when the present government gained power) to 33.5 percent according to the latest available data.» The new government had aimed at an absorption rate of 39 percent by the end of 2004. Alogoskoufis himself has blamed the Ministry of Environment and Public Works for the delay. – The development of state-owned land. «We have already presented the draft law on developing Olympic venues and we have taken initiatives to develop other state-owned land through the Tourism Development Corporation (ETA) and the State Property Corporation (KED).» – Public-private partnerships. «These partnerships will provide a new impetus to growth and will ensure the timely completion of much-needed infrastructure, while freeing up funds for more investments.»