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Only 5% of the laws adopted in Greece in 2011 are being implemented

20 April 2012 / 20:04:13  GRReporter
2555 reads

Victoria Mindova 

Only 5% of the laws adopted in 2011 are being implemented and 22% of the laws voted in 2010 have been actually useful to the state. "That is why we are now in this situation. We were telling Europeans that we adopted laws, but we have never actually applied them in practice." This is the bitter truth, which the head of the economic department at the Prime Minister's office Gikas Hardouvelis revealed. He delivered the closing speech at a forum dedicated to the promotion of small and medium enterprise within the European development strategy 2020. Local businessmen are firm that the numerous laws, coupled with the lack of their practical application, proved the scourge of Greek entrepreneurship. They gathered with Greek politicians and European experts to find a common way out of the crisis.

The tone of the meetings was moderately optimistic, but at the end of the day, one of the participants concluded, "The situation is now hopeless, but not lost." This ambiguity reflects the Greek government's embarrassment to meet the direct needs of the real economy. It is the main driving force that can pull the country out of today's crisis. Greek administration efficiency has been hopelessly low so far, but this does not mean that it cannot be changed in the near future, European experts wished. The country is about to cross a line and this will eradicate the old habits and ways of management. The question remains whether the Greeks themselves will make the change or whether it will be imposed by circumstances.

So far, many of the tools that were planned to provide financing to small and medium enterprises have not worked effectively not only at local but also at European level. This view is shared not only by entrepreneurs but also by Arnaldo Abruzzini, Secretary General of EuroChambers. In view of the situation in Greece, he proposed that the special Greek fund at the European Investment Bank (EIB) should be reformed. Currently, the funds provided by it are being allocated especially to small projects that are not profitable and do not have an impact on the real economy. The General Manager Retail Banking at the National Bank of Greece Andreas Athanasopoulos shared this opinion too. He added that banks in the country must in turn adjust interest rates on loans so that there may be equilibrium.

In order to overcome wasteful spending of EU funds for projects that do not stimulate economic growth, Abruzzini suggested that European subsidies for Greece should be directed to a large project to be launched instantly. When a man is in the emergency department, quick decisions are necessary to get him out of risk, even if those decisions are not ideal, he explained. These decisions, however, will help to restore the ailing economy of Greece. He also stated that now, the country needs investment to be returned promptly, not within ten or forty years. In his opinion, a project, which can breathe life into the dying Greek economy, is the installation of the largest solar power park for electricity production. It is not yet known if this is a feasible goal.

The Economic Adviser to the Prime Minister Lucas Papademos stressed that the lack of funding for the business is as great a problem as the cumbersome bureaucracy in Greece. "It is not an easy subject, but we must say that when a country is in a crisis, the financial system is the first to suffer and is hit the hardest." Not least is the issue of Greek economy extroversion. Greece cannot access foreign markets until it becomes competitive and export is a major prerequisite for restoring the economic growth.

Hardouvelis did not fail to list some of the most pressing issues in key sectors of the economy. Resolving them will allow the country to take a new path. In agriculture and production, it is the lack of cooperation from Greek diplomatic corps around the world in the development of trade relations. "For many years, Greek diplomats believed their sole purpose was policymaking and did not pay attention to trade relations. This must change," said Hardouvelis. As for the sector of high technology, the bad image of the country has played a practical joke. "When they hear that we are Greeks, they do not want to do business with us," young entrepreneurs, who are forced to relocate their headquarters in the UK to do business, told Hardouvelis. The problems of the state are generally obstacles to tourism development too. Even if the best hotel is established but the surrounding environment is not hospitable, tourists will not be pleased, said the adviser to the Prime Minister.

Konstandinos Michalos, president of the Union of Hellenic Chambers of Commerce and Industry seriously criticised the government. "The recapitalization of Greek banks should be completed soon. The liquidity problem has been worsening for quite a long time now and the instability of the local financial system remains. We required the process of recapitalization to be accelerated but it seems that it will remain for the period after the elections."

Michalos stressed that without the availability of credits, Greek companies are unable to develop. He noted that 99% of businesses in the country have fewer than 100 employees and small and medium enterprises create over 70% of the jobs in Greece. Michalos called for the immediate activation of the recapitalization of banks and for the encouragement of the involvement of private investors in the process. He made it clear that there is nothing more dangerous to economic development than the nationalization of the local financial system. According to him, this model requires the greatest transparency and objectivity in making decisions about lending.

 

Tags: EconomyMarketsDevelopmentHardouvelis
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