ECONOMY

Free-trade zones: A new battlefront

The Federation of Industries of Northern Greece (SVVE) has ready proposals for setting up free-trade zones along Greece’s northern borders if the government agrees, its president, Giorgos Mylonas, said ahead of a meeting with Development Minister Dimitris Sioufas in Thessaloniki yesterday. He said the idea, which is hoped to help stem the migration of Greek firms, particularly apparel manufacturers, to neighboring countries is «not to get rid of Greek workers and bring in foreigners.» In recent years, Greek clothing firms have migrated in droves, particularly to Bulgaria and the Former Yugoslav Republic of Macedonia, where labor costs are only a fraction of those in Greece. Mylonas said that SVVE’s proposals include both the locations and prospective ratio of Greek to foreign workers, although he granted that the idea is still in its infancy and would have to be approved by both the government and Brussels. SVVE submitted the idea for free-trade zones to Prime Minister Costas Karamanlis last week. Yesterday, it came under fire from the General Confederation of Greek Workers (GSEE), whose president, Christos Polyzogopoulos, accused employers of pressing for foreign workers to be allowed to work in the free-trade zones with monthly salaries of 75 euros. Unions indignant At a presentation of a union-sponsored Labor Institute (INE) study in Thessaloniki, in the presence of Deputy Development Minister Giorgos Salagoudis, Polyzogopoulos urged the government to release detailed data of the subsidies that industrialists in northern Greece have obtained over the years though they now threaten to transfer their companies to neighboring countries. Civil Servants’ Union (ADEDY) President Spyros Papaspyros spoke of «phobic and anachronistic» practices among some businesspeople, who are only interested in profits, wish to revert labor relations back to the Middle Ages and buckle under when the going gets hard. The INE study argues that Greece needs a new development model that should be agreed to by all involved. It claims that the profitability of Greek enterprises rates second only to that of Mexico, and that there is a much greater gap between the rise of productivity and wages than in the rest of the EU. Furthermore, it notes that the incomes of the wealthiest 20 percent of Greeks is six times that of the poorest 20 percent. «The extent of tax evasion and the underground economy is indicated by the fact that of 5 million tax statements submitted in 2003, only 80,000 taxpayers declared annual incomes higher than 50,000 euros,» INE said. According to recent official statistical data, the share of exports of Greek textiles and apparel products in the total fell to third place (16.9 percent) in the first half of 2005, outstripped by chemicals and plastics (17.1 percent) and foodstuffs (16.9 percent).