Galery

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Unemployment is indeed one of the biggest problems of Greece. The structural reforms we are talking about will bear fruit in the medium term, but we should immediately tackle unemployment. One way is to revive several large infrastructural projects. I cannot say that building roads is the best model for economic development, but it is a step in this direction.

Every new investment in the country, every production department that is created, every international company that decides to open a branch in Greece creates new jobs. I find it very positive that tourism will report good results this year. This means that a lot of people, mainly from the provinces, will have a job. Meanwhile, the rest of the reforms continue to apply and I expect that they will “soften” the situation by the end of the year.

Businesspeople in Greece very seriously resent the heavy tax burden. What needs to be done in order to reduce the burden of taxation on the real business without breaking the balance in the revenue policy of the government?

The problems of the real business in the country are two - high taxes and lack of liquidity.

I think that from the moment we have a stable primary surplus, we will be able to gradually reduce the tax burden on taxpayers and businesses. The supervisory Troika too is aware of the need to reduce the taxes.

A very important condition for the operation of the real economy remains the improvement of liquidity. Therefore, we need to complete the recapitalization of the banking sector. We are talking about creating innovation and production all the time, but nothing can be done until such innovations obtain the funding for development

The recapitalization is underway. However, the funds from the aid are intended to fill the holes in the balance sheets of the banks, which are due to the haircut of the face value of Greek government bonds. They will not be converted into loans to stimulate economic activity, will they?

Yes, that is right, but after the recapitalization, the Greek banks will have a higher credit rating, which will allow them to obtain funds from the European Central Bank at lower costs. Another important condition for the lending to become normal again is the return of deposits. We do not expect that the lending will expand to the level known before the crisis. Easy lending is one of the reasons that have brought us to the current situation. I think that after the summer, the operation of the banks and the lending to the real economy will normalize.

What are the alternative sources of funding of the commercial banks in Greece in addition to the European Central Bank?

The Greek banks obtain funds from the international markets as well. However, their credit rating was very low for a long time and it was very difficult to borrow money from them. After the increase in share capital and reaching the standards of financial adequacy, the funding from other sources will be easier. The European Central Bank remains a major source of funds for the commercial banks because we are part of the European Monetary System. This does not mean that we cannot obtain funds from other sources too.

Wages in the private sector have decreased by approximately 35% over the past three years. Consumption has also significantly declined. Why have the prices in the country remained unchanged?

This observation is correct. We see only this year that the rate of inflation is zero, which means that for the first time in a long time prices will remain unchanged, i.e. they will not increase. A decline has not yet been observed.

Greece is a small country. In many sectors, the operating enterprises are few and there is no serious competition. Demand has decreased on the one hand but taxes have increased on the other. This is one reason why prices have not declined. The other reason is that a large number of companies went bankrupt in Greece at the beginning of the crisis. There was not a stage of price reduction in order for consumption to increase. So, a significantly lower number of players have remained in the market who have been able to retain their pricing policy for some time despite the negative conditions.

I can mention as an example the developments in the tourism sector. Many hotels on the islands did not open during the summer last year. This resulted in lower competition and thus, the hoteliers who worked during the season kept their prices relatively high. Furthermore, we must not forget that in addition to higher taxes, the cost of energy has also increased, which has further prevented the reduction of prices.

The supervisory Troika of the European Central Bank, the European Commission and the International Monetary Fund will return to Athens in June for the revision of the Greek economy. What should the government be doing during this period?

The main tasks facing the government are currently connected with the restructuring of the public sector. There is no room for new measures such as the reduction of salaries and pensions and increase in taxes. The public sector should be reorganized and its operations should improve. This task is not easy, but it is feasible. Meanwhile, we should have completed the bulk of the process of bank recapitalization and the privatization should be going according to plan.

You are saying that the main task of the government now is to introduce a reform in the public sector. Do you think that there should be dismissals of public workers?