ECONOMY

Economic reforms at top of Karamanlis’s agenda

In his extensive interview with Kathimerini, Prime Minister Costas Karamanlis said his immediate priority is to expedite all planned structural reforms in the broad economic field. «One such priority, for instance, will be a new law on commerce, which will provide incentives to firms, zoning and the geographical delineation of activities, as well as changes in work hours. These are aimed at strengthening competitiveness and providing incentives to boost employment. There are also changes that must be made in public enterprises. I think the conditions are ripe. Third, we must tackle the serious issue of banks’ social insurance unfunded liabilities. Fourth, privatizations, beginning perhaps with gaming firm OPAP.» What about Olympic Airlines? Olympic, too, is among our priorities. Another issue is the reforms in the «labor market» chapter. Lest I be misunderstood, I hasten to say that these will not affect the current limits on layoffs or related compensation sums, but will basically deal with work/time arrangements. There is, of course, also the broader issue of reforming the country’s pension system. We have already made a first step, and more will follow, toward starting dialogue on the issue. To be sure, the problem does not need to be tackled immediately, it is a long-term issue. Any discussion must be conducted in a climate of cool-headedness, without untimely surprises, and secure the rights of pensioners and working people. It is an issue of concern to all citizens. The currently available data show us that the social insurance system will face serious problems, if not reach an impasse, in 15 years’ time. It is not just right, but also necessary for a society that cares about its future to begin a serious dialogue, and not under conditions of pressure. The General Confederation of Greek Labor (GSEE)’s recently submitted study on the issue is a positive contribution. I think there will have to be more. The government intends to urge the social partners (unions and employers) to begin this effort. Do you see this as a target for 2005? The reform will not be finalized in 2005 but the dialogue has to begin this year. Speaking generally, can we say that 2005 will be the crucial year? The year 2005 will certainly be one of reforms. In this sense, it is very crucial. You may add – to what I have already mentioned as indicative initiatives in the near future – reforms to general zoning plans and the deregulation of the markets for energy, electricity and natural gas. If you add it all up, it amounts to a wave of changes that will overhaul the picture of economic activity, will open up investment opportunities and give confidence to the economy’s prospects. Critics say that Karamanlis has not brought in new people in government and the state apparatus. This criticism is ridiculous. Only two members of my government have served as ministers before. In key posts in public administration, most new appointees have come from the private sector. In any case, no position is permanent. Everyone is tested and there is an increasing need to attract people who have excelled in the private sector. I have to tell you, however, that there is no particular desire for such moves, because we all know how inefficiently the nuts and bolts of the public sector work. You may rightly counterargue that the question is not just to realize the situation but to take care of it. A series of serious measures have already been taken. Take, for instance, the cuts in red tape by the ministries of Public Administration and Development. In company licensing, the number of signatures required has been reduced considerably. The validation of signature authenticity is also abolished. Certainly this diminishes hassles for citizens but does not eliminate them. To this end, a working group of specialists and technocrats has sought the help of foreign consultants to study specific issues and submit more complete views on bureaucracy in the next few months. All in all, we have taken steps, there is an improvement, but this fight is certain to be long-lasting. Red tape discourages investment, without which development is impossible. In Greece, there has been no serious large foreign investment in the last few years. The reasons are obvious. One has to do with the lack of incentives and a favorable climate. We are dealing with that. The investment incentives law has already begun to show results and the first sample of proposals we have received is very good. Tax incentives have also become law. The second reason is red tape and the third is inadequate zoning. This rezoning is being expedited by the Public Works Ministry at national and local levels. We therefore hope to unblock within the next few weeks two or three big investments, such as a large tourism investment in Messinia, a wind-power initiative by Japanese investors that has been blocked for nine to 10 years in Laconia, and a big tourism investment in Siteia, Crete. Is the bill on public-private partnerships making progress? Yes, and I believe it will be presented soon. It is a very important bill, as projects by public-private partnerships are necessary to build strong momentum in development in coming years. Already the Public Works Ministry is speedily promoting large jointly funded projects, such as the undersea road tunnel of Thessaloniki, the Ionian highway and the Corinth-Patras national road.