The government is giving strong emphasis to reforming the economy over time, including the private sector which must also undergo restructuring, Economy and Finance Minister Giorgos Alogoskoufis said yesterday. «We cannot compete with other countries that rely and will rely for their economic development on low labor costs. On the contrary, we must place emphasis on innovation, product quality and large investment schemes,» he told an event organized by Kerkyra Publications, the publishers of Economic Review. Alogoskoufis said Greece must seek the convergence of its low wages (about 70 percent of the EU-15 average) through an improvement in its economic base. «Improving productivity and competitiveness will facilitate this.» He argued that measures in favor of business were often misunderstood. «What is done for enterprises is of interest to individuals as well, as they pay their employees’ salaries.» Among the central goals of economic policy in the years ahead will be to bolster Greece’s presence in SE Europe and the Balkans, where growth rates will be very high, Alogoskoufis said. «In the next five to 10 years, these areas can become Europe’s economic miracle,» he predicted. He said Greek banks could still reduce interest rates further, and recognized that the cost of living is high but partly attributed to the previous PASOK government’s inadequate preparation for the introduction of the euro.