ECONOMY

‘Economy must become more outward-looking’

Greece cannot continue as a protected economy and must become more outward-looking if it is to keep abreast with developments abroad, Economy and Finance Minister Giorgos Alogoskoufis said yesterday. «Phobias are manifested each time there is a large foreign investment which leads to a transformation of the Greek economy, or whenever there is a large privatization or a strategic alliance is attempted,» he told an event organized by the Hellenic Federation of Industries (SEV) on «The Structures of the Greek Economy.» Alogoskoufis said the government is currently in negotiations with Deutsche Telekom (DT), perhaps the most important European utility in the sector, for a strategic partnership in OTE telecom, in which the German giant has agreed to buy a 20 percent stake from buyout firm Marfin Investment Group. OTE workers are opposing a deal, citing among other things issues of national security. Alogoskoufis said the negotiations are focusing on a balanced management scheme, while the goal of the partnership is to ensure the growth and modernization of OTE, not just in Greece but in the broader geographical region. «At the same time, let there be no doubt that we are securing our national and political interests,» Alogoskoufis said. The present government is pursuing reforms without considering the political cost entailed. «The government prefers to be useful rather than pleasant… Every day we take a step forward, despite the reactions,» he said. Tangible results of the reforms are the reduction in the fiscal deficit from 7.3 percent of GDP in 2004 to below 3 percent in 2006 and 2007. «Nevertheless, the economy still suffers from serious structural weaknesses, with the public sector remaining the main «sick man.» And despite the progress made in reducing the public deficit, efforts are still needed to complete the process of fiscal consolidation,» Alogoskoufis said. He added that the government’s next initiative will be to bolster transparency in public organizations, hospitals, tax offices and local government. Alogoskoufis welcomed last week’s pay pact between employers and unions for cumulative increases of 12 percent over two years. «It will lead to a further improvement in real incomes without placing additional burdens on inflation,» he said. He added that the impact of the negative international economic climate on Greece will be limited, noting that the country’s economic growth rate is double the eurozone average. SEV president Theodoros Fessas said what is at stake is the improvement of the business environment and the growth of enterprises, as well as the progress of Greek society. He urged the government to commit itself to specific goals and timetables in the next phase of reforms.