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Business Urges the Government not to Fall Victim of Blackmail

28 July 2010 / 09:07:16  GRReporter
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Full liberalization of the Greek market can lead to 13% growth of GDP in the medium term, including abolition of the restriction of transport licenses, suspension of cabotage, canceling restrictions on the maximum number of companies that offer certain services as a whole. This is what the economic analyst and president of the Institute for Trade and Industrial Research Yannis Sturnaras stated on a meeting to evaluate the first nine months of the governing of PASOK. The meeting was organized by the Hellenic-American Chamber of Commerce. Its chairman of Janus Gramatidis and the economic specialist from Boston Consulting Group Nikos Vretos took part in it.

“Do not fall victim of blackmail towards economic stability,” Janus Gramatidis urged the government in connection with the ongoing strike of carriers in Greece. He clearly announced his support for reforms in the local economy and opening of closed professions as one of the main conditions for increasing competitiveness of the Greek products and services. Business circles in the country represented by the American Hellenic Chamber of Commerce believe that facilitating administrative procedures and development of market economy will very quickly attract foreign direct investment (FDI), which can accelerate the economic recovery of Greece.

“Do not expect that Chrysler will come and make a plant in Greece tomorrow. It more likely will direct such investments to China or Korea, but not to Greece,” Nikos Vertos commented the correct definition of investment objectives. He pointed out the main sectors that would be of interest to foreign investors – tourism, transport services, energy, food industry and agriculture. The state should create appropriate conditions in these areas so as to facilitate the revival of production and exports.

Overall, experts stressed that the task for which the present government assumed responsibility should have been applied consistently for at least ten years to avoid social tension in recent months. They assessed the economic policy of the government of George Papakonstantinou as correct, but they gave and their proposals for a rapid restoration of financial stability.

Meanwhile, the mission of the IMF, the European Commission and the ECB continues its staged inspections of the Greek ministries, finishing them in the Ministry of Economy, Development and the Merchant Marine The main issues of Commissioners were placed around the average level of prices in the country, inflation and government projects subsidized by EU money.

In terms of average prices, Commissioners have noted that despite the recession and reduced demand as a whole, market prices have not made a significant downturn. According to an anonymous source from the Ministry of Economy this is due to the specific characteristics of the Greek economy, which rests on a large number of small enterprises. They are little flexible in pricing because of lack of cash. According to the same source, the sharp drop in prices of goods and services that most of these companies and traders offer would mean bankruptcy. Another reason, that hinders the proper shrinkage of supply (also on price level) to demand is the high level of operating costs of the commercial and industrial enterprises in the country. Level of expenditure on rent, electricity, taxes and licenses, etc in Greece is still high and does not allow small and medium enterprises in the country to reduce the prices of their goods and services.

Tags: EconomyMarketsLiberalization
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