Growth story

Foreign analysts and academics are all asking the same question: «Tell us where economic growth will come from and we’ll tell you if you are going to make it.» Finance Minister Giorgos Papaconstantinou was recently asked that same question: «Tell us your growth plans.» The figures are inexorable and they cannot be undone by prolonging Greece’s repayment schedule. Little will change unless Greece manages to change its ratio of loans to gross domestic product. The problem is that no one within the Socialist administration seems to have any convincing answer as to how to fuel growth. Of course, there are the usual recipes of major public works, such as highways and public-private partnerships, a classic recipe that produces instant results – and not just for the construction sector. Unfortunately, this is where the first two obstacles emerge. First is the lack of communication between the various ministries, as each has different, often rivaling priorities but there is no overriding guidance. A second problem is that Greek banks do not have enough capital to finance such big projects, while foreign lenders have been shying away from the country after the disastrous handling of Thessaloniki’s undersea tunnel project by former conservative Public Works Minister Giorgos Souflias and more recent cases where the state failed to return value-added tax. The National Strategic Reference Program, better known here as ESPA, appears vulnerable to pressure and political connections. Without a clear objective and effective monitoring, ESPA has fallen prey to partisan lobbying. Regional Development Minister Michalis Chrysochoidis wants to identify exports that could be supported. But when it comes to state support, all businesses have the same complaint and demand: «Please leave us alone.» A foreign diplomat recently remarked: «I see a country that is wasting its energy fighting about who will get the biggest share of a small pie. Why don’t you finally do something to make the pie bigger?» This is the central question that awaits an answer. Save for some fireworks about green development, the Socialist government had done little to prepare for this. The truth is the business community has had little to bring to the debate either.

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