Private enterprise must now prove true to its word

The International Monetary Fund’s (IMF) recent report to the government on the Greek economy has highlighted the impressive difference that the first wave of reform measures have made in the overall economic climate from last year. Of course, the various surveys monitoring business confidence have yet to show a turnaround in the negative readings of certain indicators, such as investment and sales. This is expected, as the reforms have only recently been passed into law. However, as the economy is more about climate than mere indicators, the feeling in the market is important. For instance, the new shop hours may still be restricted to supermarkets and some department stores, but the strong wind of competition will soon encourage other traders who are still hesitating to make new hirings. Meanwhile, the more flexible seasonal arrangements in work hours have been accepted by workers and we shall soon see the beneficial effects on employment. Also, the abolition of permanent employment status for new hirings in OTE telecom has opened the way for the rehabilitation of utilities, the huge deficits of which have traditionally burdened the taxpayer; privatizations are making progress. Although important, these reforms are not sufficient, and Prime Minister Costas Karamanlis does not tire of repeating that his government will persevere until the economy is modernized. It is, however, already clear, that a new model of economic policy is beginning to take hold and the market feels the change coming. The core of the new model is that the main lever of growth will be private enterprise, and it is for this reason that the new measures are aiming at a favorable and attractive investment environment. At a recent dinner with 200 businesspeople in Thessaloniki, EFG Eurobank’s Managing Director Nikos Nanopoulos stressed that now there are «mature conditions for the assumption by the private sector of the role but also the responsibilities of the real growth lever of the Greek economy.» «Private enterprise will have to prove that it possesses the capabilities, that it is marked by this modern perception, that it is steadily oriented toward the search for continuous improvement, knowledge and quality and that it does not balk at competing with anyone abroad,» he said. Up to now, business argued that the unchecked state sector was the main obstacle to its expansion of activities. Now, there is a government which has considerably reduced taxation on profits, has cut red tape in business licensing, is trying to make the labor market more flexible and, with the private-public partnerships for public projects, is giving the private sector room for growth. Now there is no room for excuses. The private sector must prove itself.