Market reform

The announcement by Miltiades Evert yesterday, in which the former conservative deputy and former New Democracy chairman pointed out that three months after the national elections the «suspect administration of the stock exchange» is still in place, raises a very crucial issue regardless of whether one believes the claims of its misdeeds. Indeed, the current state of the stock market and the position of its administration are issues that must be tackled as soon as possible, even if one holds that the responsibilities held by the bourse administration for the slump of the past years are owed to market imperfections and not to specific acts that can be prosecuted. No doubt the fact that the Sophocleous St administration was appointed during the now-departed government of PASOK socialists and that it is currently under investigation has paralyzed the stock market. Under the specter of their removal and the burden of the charges against them, the members of the Athens bourse administration have reduced their tasks to a minimum, effectively taking virtually no initiatives to clean up the market. This inertia – understandable on the side of the accused – is putting the brakes on the Athens Stock Exchange while hindering it from functioning as a capital-raising mechanism. At the same time, the bourse still falls short of attracting money savers and investors. Despite the low interest rates – which are currently below inflation rate – savers have stayed away from Sophocleous as they see that no steps have been taken to ensure that the misdeeds will not be repeated. The current administration has to be removed regardless of whether it is to blame for past misdeeds. This is a condition for the much-needed overhaul and recovery of the market to allow it to fulfill its institutional role as a lever for growth. The government explanation for its delay in shaking up the administration is groundless, as the stock market is indeed a holding company controlled by banks but the main shareholders are state-owned banks, while the rest can be influenced and make way for the appointment of a new executive board (the government yesterday hinted at an administration change at the end of July). It should be added that a change of the board should not stop at a reshuffle but must be the first step in a larger overhaul that will help restore public confidence in the stock market and its role in the economy.