Successive development laws have failed

THESSALONIKI – Three times during the 1990s, Parliament passed so-called «Development Laws» designed to bring in foreign investment and narrow to some extent the gap separating the Athens area from the other Greek regions. Law 1892, passed in 1990, was succeeded four years later by the revised Law 2234, which in turn was amended by Law 2601 in 1998. Four years later, the government is ready to present yet another amended development bill sometime during the first half of 2002. The regularity in drafting legislation clearly suggests that none of the previous laws has achieved the intended results. Data compiled by the Federation of Industries of Northern Greece (SVVE) reveal that regional inequalities persist and if anything, have got worse. During the period 1989-99, the only region whose share of the country’s gross domestic product (GDP) has increased is Attica; its share rose from 35.99 to 38.49 percent. All other regions saw their share drop. All the existing investment incentives have succeeded in doing is to favor one and only one region, Attica, to the detriment of others. Another indication of uneven development is the fact that only three of Greece’s 13 regions – Attica, the southern Aegean and Crete – have an average income higher than that of the country as a whole. EU funds absorbed by Athens Attica accounts for 36.5 percent of all manufacturing workers and 37.3 percent of employees in services. Western Macedonia and Epirus, having endured long years of de-industrialization, with old plants shutting down operations, now boast the highest rates of long-term unemployment (14.5 percent and 11.2 percent of the work force, respectively). Another revealing fact is that 60 percent of direct subsidies to companies from the EU-sponsored Second Community Support Framework (1994-99) went to companies with headquarters in the Athens region. The latest law, Law 2601, is too rigid, SVVE complains, and does not allow funds to be shifted to the most needy regions. Moreover, the northern industrialists allege, investment-drawing incentives were inadequate and the few that did perform adequately did not last long. Reducing regional inequalities is not merely a matter of social justice, SVVE says. It is also important to implement before the entry into the EU of Balkan states, which will require many more subsidies.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.