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Victoria Mindova

The Greek problem is increasing from year to year and instead of limiting the crisis, the reforms implemented so far have transformed it and created new shocks. The problems related to the country's macroeconomic indicators have revealed serious deviations in the activity of the local economy and the state's structure. GRReporter sought the opinion of one of the best Greek business journalists, Ilias Siakandaris, about the development of the events and his comments on current issues related to the crisis, the recovery programme and the future of Greece.

Greece has implemented a lot of reforms, but unfortunately the results do not meet the expectations. What is the reason for this?

The public sector remains the main reason for frictions between the government and the mission of the creditors. The political system in Greece doesn't have the power to face its own creation, which is today's giant public sector. The parties, which are now involved in the coalition government, are the ones which hired the hundreds of thousands of voters for state jobs and today it is very difficult for them to tell those employees, "Thank you for keeping us in power for so many years. Now you are fired."

Another big problem in Greece is that there is no single mechanism for assessing the quality of work in the public sector. Such a mechanism would give a clear picture of which organizations are needed, which ones are not necessary for the state, which officials meet the criteria required and which do not meet them and are therefore unnecessary.

Hence the main problem in Greece - a culture of behaviour, which has been built for decades, needs to be changed in just two weeks. For example, the assumption that the state service is a constitutionally guaranteed job and no one can make you leave, regardless of whether you work effectively or not.

I think that by the end of the year, some kind of a personnel assessment will start so that the unnecessary burden can be slowly and gradually relieved. I do not think that 30,000 or 15,000 people will leave by 2013, but I think the process of shrinkage of the public administration will start more actively.

What do you think about the possibility of Greece leaving the eurozone and returning to the drachma?

This would be a very good opportunity for the country's development, if Greece had serious production, high employment, effective administration with no corruption and if the economy wasn't ruled by various lobbies.

Unfortunately, knowing my country, if Greece is outside the eurozone at this time, this will allow the people, who are responsible for its current situation, to print unlimited money. And not in order to change the economic model of the country and make it a competitive exporter, but only because they will have the opportunity to do so. I can tell you that Greece had serious inflation in the past and in the eventual return of the drachma, nothing will stop it happening again.

It will be very difficult for the country to survive independently outside the euro, given the economic situation in Greece and the financial culture of the Greeks. The drachma will benefit only those who have already secured a large capital abroad.

In a period in which we have almost no confidence in the political system, to trust it with the right to print money is almost a nightmarish scenario. On the other hand, I do not think that Europe has the most logical policy on the absorption of the debt crisis. It is constantly changing its position on key issues, it doesn't make bold decisions, and this does not inspire confidence. This means that of two bad situations, you choose the less bad one.

Privatization processes in Greece are dramatically delayed. Why is this happening?

Privatization is still a major issue in the Greek recovery programme agreed with the foreign creditors. The truth is that the plan for privatization revenues, amounting to 50 billion euro by 2015 from a market with tumbling prices, was incorrect and unrealistic from the very beginning. Many and various questions arise when one is trying to sell in a shrinking market.

Nobody would volunteer to privatize in such a situation. The political situation remains toxic - if the government changes, who can tell whether there won't also follow a change in the strategy and court trials for a withdrawal of the deal.

Different challenges are encountered at the majority of privatization sites. The case in point here are not some assets which are ready for sale. These sites have problems in terms of their ownership, management and rights of use. The first list of state assets for privatization includes limited liability companies, which are more easily transferred.

Furthermore, privatizations are inevitably associated with layoffs, which will surely meet with huge resistance in the country.

What needs to be done in order for the privatization programme to become feasible?

Firstly, I think that the government, in agreement with the creditors, will set more realistic goals to accumulate funds. Probably the new target for privatization revenues will be between eight and ten billion euro by 2015.