Minister exorcises criticism of State’s investment policies

Economy and Finance Minister Nikos Christodoulakis is still mad at former Hellenic Center for Investment (ELKE) head Costas Bakouris. It showed in the manner in which he attacked him yesterday at an ELKE-sponsored event, which went far beyond the usual bounds of criticism. In short, according to Christodoulakis, Bakouris was a dilettante suffering from a «fashionable» denunciation complex, who reveled in expensive junkets and feasts instead of doing what he was appointed to do. The reason for this bitterness was a report, presented last Thursday by Bakouris, that enumerated the factors holding back foreign investment in Greece. Greece is a laggard in direct foreign investment among developed nations: In 2000, it absorbed only $1.1 billion of the $706 billion invested globally. Last year, with the exception of the buyout of insurance company inter-American from pan-European insurance consortium Eureko, there was a net outflow of foreign funds. The report’s findings were nothing new: They include the lack of infrastructure – although things are constantly improving on that front – rigid labor laws, complex and constantly changing tax laws and a lack of specialized staff at local level. Christodoulakis’s furious reaction was unexpected, at least to outsiders. He accused Bakouris of «slandering» the economy and, yesterday, became downright populist by declaring that «investments will not come, neither through extremely expensive feasts and luxurious symposia, nor through expensive junkets abroad.» This was a direct reference to Bakouris’s trip to Salt Lake City during the Winter Olympics earlier this year. Given that other countries spare no expense in promoting themselves as suitable destinations for foreign investment, Bakouris’s trips were frugal affairs. None involved large business delegations. Christodoulakis yesterday presented another vision of Greece as an attractive place for foreign investment. He referred to the 2004 Olympics and projects funded through the EU’s Community Support Framework Program (CSF) and spoke about social security and tax reform and about a new development law. The Olympics and CSF projects offer opportunities, indeed. The benefits will not last beyond the end of the decade. As for the social security reform, this weak compromise dictated by the unions solves none of the problems that demographics will inevitably bring. The tax reform is quite extensive but falls short of dramatic tax cuts. As for the development law, the third or fourth brought by this government, one wonders why the previous ones did not work. In short, Christodoulakis addresses none of the issues raised by the report. Greece is being increasingly criticized for employing accounting tricks to hide its level of indebtedness; Christodoulakis, as deputy finance minister, was the architect of this strategy. Instead of railing at the messenger, he should have been more self critical.