ECONOMY

Gov’t lays out 2007-2013 plan

Greece has to extricate itself from dependence on European Union resources, Economy and Finance Minister Giorgos Alogoskoufis said yesterday. The Cabinet had earlier approved the allocation of 20.4 billion euros of such funds in the 2007-2013 period. «Greece must stop viewing the European Union as a bank,» he said in a speech on reform delivered at the Constantine Karamanlis Institute of Democracy. By 2013, he said, Greece’s living standards will have improved considerably. The sum of 20.4 billion euros of EU funds will be part of the 31.2 billion National Strategic Framework (NSF) of investment subsidies, which will succeed the Third Community Support Framework that is ending this year. The remaining amount will come from the national budget, while the above total does not include private investment participation. Prime Minister Costas Karamanlis, who chaired the Cabinet meeting, called on ministers to «avoid the mistakes of the past and secure the prospects of tomorrow.» He said the basic component of the policy permeating the planning of the NSF is to bolster the development of the regions, which will receive 82 percent of the resources via the European Regional Fund (18.6 billion euros) and the European Social Fund (5.9 billion). Attica will receive the remaining 18 percent. The sum of 31.2 billion euros does not include funds committed for agricultural development and fisheries, which bring the EU contribution total to 24.4 billion and the NSF total to 36.4 billion. The addition of farm subsidies is estimated to bring the grand total of EU inflows in the 2007-2013 period to 55 billion. Karamanlis specified that 42 percent of the program will be allocated to infrastructure projects in the domains of transport, environment and urban development. Twenty-one percent will fund initiatives in innovation, competitiveness and digital convergence, 14 percent will go to education, 12 percent to boosting employment and 4 percent to health services. Reform In his speech, Alogoskoufis said Greece was a characteristic example of inadequate and late adaptation to modern requirements. He said that despite the huge amounts of resources absorbed in the last 25 years, including EU funds, the country’s state-dominated development model resulted in: – A relative stagnation of our living standards compared to our main competitors. – A rise in unemployment from 3 percent in 1981 to 11.3 percent in 2004. – A bloated public sector, where the number of employees rose from 327,000 in 1981 to 596,000 in 2003. – An inward-looking attitude and a decline in competitiveness. – A rise in social and regional inequalities, and an inflated bureaucracy which undermined entrepreneurship. For the reforms to be promoted, Alogoskoufis said they must not clash with society. «At the initial stage of implementation, a safety net is required for those who may be hurt by the reforms, which will allow them to be protected and adapt,» he said. An effective reform policy must clearly target economic and social institutions and take into account economic and social limitations. Its components must have been analyzed and subjected to a broad public debate, he said.