ECONOMY

Bold proposals by the central bank governor

The Bank of Greece warned in a regular report yesterday that there is no scope for further tax hikes and suggested that the government reach two-thirds of its financial goals by stopping the waste of public funds and one-third of its targets by beating tax evasion. In the Intermediary Report on Monetary Policy, the central bank’s governor, Giorgos Provopoulos, also cites six reasons why Greece will not go bankrupt, as such a development «is neither necessary nor desirable nor possible.» In order to cut public spending, Provopoulos goes on to recommend 24 «indicative measures,» including shutting down various state corporations, suspending others, reducing civil servants and promoting certain institutional changes, such as a major change in university education funding. He even proposes merging the state television channels from five (ET1, NET, ET3, ERT Digital and Parliament’s Vouli channel) into just two, adding that the levy paid by households to the state broadcaster via electricity bills should go instead toward repaying the country’s debt. Other proposals include an increase in public transport fares, the use of public real estate to house state agencies and the utilization of all other properties as well as a strict financial policy by local authorities that should see them balance their books. Tax evasion can be beaten with the introduction of a taxpayer serial number and the creation of a personal electronic file for everyone over the age of 18 years of age, argued Provopoulos. There was no immediate reaction by the government to the proposals, which would signify major policy changes in various domains. The report also predicts that the recession for 2010 will come to 4 percent, and a rebound will come about with an emphasis on exports and the attraction of foreign direct investment, more flexibility in the labor market and the bolstering of competition in the product and service markets. It also estimates that unemployment will exceed 12 percent this year and suggests that if those underemployed in the first half of 2010 were factored in, the jobless rate would reach 16.3 percent.