ECONOMY

Fourth CSF package is a national success

The 20.1 billion euros of investment subsidies allocated to Greece for the 2007-2013 period at last week’s EU summit is a great national success which will give a robust push to the country’s development efforts. For an economy like Greece’s, whose investment inflows do not exceed, even in the best years, 1 billion euros, this is a strong boost. Additionally, Greece will receive 2.8 billion euros in farm income supports, which, along with the 20.1 billion to be granted under the Fourth Community Support Framework (CSFIV) plan, will enable it to fund extensive restructuring and modernization programs for its agricultural sector, while also securing the incomes of its farmers. The magnitude of the success is highlighted if one considers that most analysts considered that, given the cuts in the EU budget and the fact that the CSF program would have to cater to eight new countries clearly poorer than us, Greece could have been allocated much less than under the Third CSF. So, congratulations are due to Prime Minister Costas Karamanlis for his deft and flexible navigation among the conflicting interests of the big powers and for succeeding in obtaining everyone’s approval for what he originally asked for. Besides the 20.1 billion euros, Greece also obtained additional assistance in the absorption of the package. Under the rules hitherto in force, member states have to disburse EU investment subsidies within two years of their earmarking, otherwise they lose them. About 500 million euros was lost under CSFII and another 1 billion is now at risk of being lost from CSFIII. At the Brussels summit, it was agreed to extend the disbursement period to three years. We must also note that CSFIV’s impact on Greece’s economic development will not be manifested simply through the abundant investment subsidies it will grant but also through the sectors it designates for reception. Whereas CSFIII basically boosted infrastructure and large public projects, laying the foundation for an expansion of economic activity, CSFIV funds will be oriented toward funding reform policies, employment programs, the knowledge economy and partnerships between the public and private sectors. The qualitative characteristics of CSFIV are, therefore, especially dynamic and aim at bolstering sectors that clearly have been lagging behind. This would contribute to making the development process more sustainable. To be sure, for such factors to work effectively for the economy, it is necessary for public administration to be able, first, to absorb the funds; second, to allocate them to the most efficient sectors; third, to mobilize the supplementary private capital required; and fourth, to ensure the transparent use of the funds which was seriously lacking in the past. All this, of course, presupposes the big reform of the state which the ruling New Democracy party pledged before the elections and which we have yet to see. There are two encouraging developments in this respect: first, the plan to create five large regional authorities in the country, the heads of which will play a major role in the management of the funds so as to bypass phenomena of corruption at prefectural level; and second, the Economy Ministry’s proposal for an abolition of the CSF auditing authorities now operating at other ministries and their integration into one under its own supervision.