ECONOMY

Business hopes that next year will finally bring bold reforms

Greek businesspeople will bid farewell to 2005 with the hope that next year will at last bring fundamental economic reform. When asked privately to assess government performance this year, businesspeople do not sound pleased, even though nothing went awfully awry unless you count fiscal management, which carries the burden of past sins. But there is a widespread feeling that the government failed to act decisively to restructure and modernize the economy, even though there has been intense pressure to do so. Businesspeople say that the 20 months of governance by the center-right New Democracy party have resulted in no great changes to economic policy. The ubiquitous state presence has not been reduced, and no significant measures have been enacted to boost investment and competitiveness. Furthermore, the state bureaucracy has not become more business-friendly, and promises to accelerate the absorption of earmarked EU funds have proved empty. The only serious issue the government has tackled is the abolition of lifetime job security for new hires at state-controlled utilities, which could become law if a draft bill now before Parliament is approved. It’s an important measure but its implementation remains to be seen. Consider what happened with approved legislation to reform the finances of bank employees’ pension funds. The measures have yet to be implemented several months after they were passed. Last hope The prevailing assessment is that the government has identified the system’s weaknesses but seems too weak to act decisively to improve the economy’s prospects and inject a new dynamism. According to employer representatives, 2006 provides the last hope for important decisions because the government won’t be distracted by the next national election, set to take place by April 2008. Will the government have the courage to act? Businesspeople hope the answer is yes. They say privatizations will be the crucial litmus test since they offer the safest way to attract large investments from domestic and foreign capital and can provide the fastest boost to competitiveness as well as to the Athens Stock Exchange. They also offer revenue that will help reduce the deficit and the debt. Planned moves Former state telecoms monopoly OTE is ready to enter into a strategic partnership if the government gives its approval. The same can happen with banks such as Emporiki and the Postal Savings Bank. These moves will prove that this government is offering a new approach and is serving as a true agent of change. So next year could be the year of a «velvet revolution.» And Greece is not an isolated island, so the changes happening across the globe are also bound to arrive here soon. We cannot afford another year of inadequate and shortsighted management that only maintains the status quo.