ECONOMY

SEV on competitiveness

High non-wage and overtime costs are the two most serious impediments to improving business competitiveness, according to a survey carried out by the Federation of Greek Industries (SEV) in May 2005. According to the study, competitiveness is adversely influenced to a large extent by laws and regulations, which, although introduced with good intentions, in effect work as obstacles to business. SEV lists five fields in which various provisions act as brakes to entrepreneurial growth, and compares changes from last year. These are red tape, taxation, labor regulations, institutional framework for investment and training of human resources. More enterprises this year believe the greatest impediment to competitiveness is the issue of non-wage costs, with the cost of overtime coming second. Regarding taxation, the biggest obstacle is unclear and complicated legislation, which was the second most serious impeding factor in this category in 2004. This year, second place is taken by high tax rates, which were first last year. An important development in improving competitiveness was the new tax law which provides for the gradual reduction of rates over three years. Red tape remains one of the most serious obstacles, but its effect seems to have significantly receded, from 57.8 percent last year to 34.5 percent. This, according to SEV, is mainly because 19 percent of firms believe new regulations introduced this year will bolster competitiveness, along with investment incentives, while lower public administration costs should improve infrastructure for business. Finally, an important factor for competitiveness is providing proper training for human resources through the country’s education system.