Measures to woo investors, stabilize spending in 2003
Faced with shrinking revenues and continued demands for funds, the government yesterday unveiled measures to attract investments, cut down on tax evasion and lay the foundations for better expenditure control next year. The State’s decision to woo private investors comes after industrialists early this month pointed to a slower pace of investments in the first two months of the year. Steps to boost tax takings and improve budget management in turn have gained urgency after the Finance Ministry early this week said that primary spending had more than doubled to 13.5 percent in the first two months of the year from an annual target of 5.4 percent. The overspending was blamed on compensation paid to farmers hit by the cold snap and grants made to pensioners and large families. Compounding the government’s problems, revenues edged up by only 1.1 percent against a 7.9-percent annual target. As part of a strategy to attract private investments, the State will set up a committee which will clear the bureaucratic bottlenecks holding up private investments and monitor their progress, Economy and Finance Minister Nikos Christodoulakis said yesterday. He said the Hellenic Center for Investments will once again be in charge of awarding permits. A ministerial committee will also be created which will have overall responsibility for the entire process. He said the State plans to give a major boost to projects backed by community funding with an injection of budgetary funds amounting to 3.8 billion euros. Such schemes should focus on IT infrastructure for small and medium-sized enterprises, the manufacturing and tourism sectors, and the fishing and agricultural industries. Tenders are due to go out in the next five to six months. On the issue of tax evasion, Christodoulakis said the government will be tabling a bill shortly which will reduce property tax privileges currently enjoyed by offshore companies. Firms benefiting from state investment subsidies will also be forbidden to have any asset transactions with offshore companies. Marking a shift from this year’s budget, which focused on boosting revenues rather than cutting expenditure, the minister said the 2003 budget would stress better cost management, with spending tied to the efficiency of the project. The General Accounting Office will monitor the process. The minister also announced measures to breathe life back into the moribund state privatization program with the formation of a ministerial committee in charge of the size and form of the sello-ffs of state-controlled enterprises. It is also expected to set a time frame and the steps necessary to complete the process. The legislation on privatization also allows the State to keep a golden share in companies considered to play a social role even after it sheds majority control. Christodoulakis said this would apply to telecoms operator OTE and oil refiner Hellenic Petroleum.
