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Victoria Mindova

A wave of positive reviews has hit Greece after the latest report of the International Monetary Fund on the state of its economy. GRReporter has sought the expert opinion of Angelos Tsakanikas, head of the research department of the Institute for Economic and Industrial Research (ΙΟΒΕ) in Athens, who is analyzing the economic situation of Greece for our readers and has made a forecast of the development in the medium term.

The latest report of the International Monetary Fund shows that Greece's economy has stabilized. Do you agree with this?

If we compare the state of the country today with that of a year ago, we can note that there was much uncertainty connected with the position of Greece, with its economic situation and political stability. It was uncertain whether we would remain in the euro zone and it was not clear whether there was any political will to pursue the reforms.

This year, a very large part of this uncertainty no longer exists. There is no debate on "euro or drachma", the programme to recover the Greek economy has been applied in accordance with the bailout agreement and, apparently, the implementation of the structural reforms has greatly intensified. The financial situation is much better, there are positive signals from the tourism sector and the implementation of the privatization programme has started in practice.

This means that we are in a much better position compared to the same period last year, which allows us to be moderately optimistic or less pessimistic at least about the future of the country.

You are saying that we can be less pessimistic about the future of Greece. Which are the greatest challenges facing the government today?

The biggest problem that needs to be addressed is how to attract fresh funds to the country. For better or worse, the funds that we now have and will have in the next few years are insufficient and we should therefore attract new investments. They will create new industries and new jobs, because right now, unemployment has reached extremely high levels.

That is why reforms that will improve the conditions for doing business in the country should be implemented immediately. We have to cope with bureaucracy, the implementation of business projects and the entire system on which the development of entrepreneurship is dependant. This is the main challenge facing Greece at present. In addition, we should use the state property in the best possible way.

It was believed three years ago that this would bring fifty billion euro into the state coffers. Now, it is not expected that privatization revenues will exceed nine billion euro. What will the immediate profit for Greece from the privatization programme be in your opinion?

Fifty billion euro is not a real value today, but this is not the point. We must not focus on the amount that we can obtain at the beginning (up front). The important thing is that the Greek government has to make a very good deal, which very clearly sets forth the obligations of the investor in the coming years, such as the investment of funds and the development of the privatized business. The positive result comes from the value of the investment to be made in order to expand a privatized company rather than from selling it at the highest possible price. You can sell an asset at a price slightly lower than expected, but in return, the investor can pledge to open new jobs in the country and to develop an ambitious investment plan in the future.

As regards the sale of Hellinikon airport for example, the selling price has been persistently discussed but there is no data on how much money the new owner will put into the development of the site.

What are the most attractive sites for sale that Greece can offer within the privatization programme?

Surely, one of them is the old airport in Hellinikon. The sales of the companies related to the natural gas, namely DEPA and DESFA, are of strategic importance too. The Prime Minister has already planned a visit to China to attract new investments. Generally, the sectors of energy, tourism and infrastructure, which includes the construction of roads, ports and airports, are of key importance for the development of the economy. Projects in these sectors can turn Greece into a central logistics centre in Europe.

It seems that Greece is making more efforts to attract investments from the Arab countries and China. What is happening with the investors from Europe and the United States?

I cannot agree that there is no investor interest from the United States and Europe. Investors and European and American funds, which show a strong interest in the development opportunities in Greece often visit us at the Institute for Economic and Industrial Research (IOBE). We had such visits last year too, when the political and economic situation was much more uncertain. If half of this interest grows into real projects, I think that there will be significant revenues of funds.

I must note in addition that OPAP, for example, was not sold to the Chinese. An investment fund with Greek and European presence has bought 33% of it. Water management companies attract the privatization interest of French funds.

It will take time to implement the privatization programme and for it to begin giving tangible positive results. What can be done to start to solve the problem of unemployment, which has exceeded 27% this year?