George Alogoskoufis

On the performance of the Greek Economy

"The Greek economy is responding to our reforms. The performance of the Greek economy is remarkable given the rising oil prices, the weak economic performance in the Eurozone and the policy of fiscal adjustment process we are currying out in order to reduce the high budget deficits of recent years. During the first quarter of 2006 the rate growth stood at 4,1%, while during the same period in 2005 the growth rate was 3.4%. This is among the highest rates of growth in the EU and the eurozone, where the average growth rates for 2005 are estimated to be 1.6% and 1.3% respectively".

On the reforms

"To stimulate economic growth and improve Greece's competitiveness we have enacted several structural reforms. The new Tax Reform Law has introduced major cuts on corporate taxes that aim to spur private investment with a three-step reduction of corporate tax rates from 35% to 25% by 2007. The New Investment Incentives Law offers generous incentives to private investment projects by encouraging investment in every region of the country. These incentives aim to make the most of Greece's comparative advantages. They cover most of the sectors of industrial and commercial activity, as well as services. The Law for Public-Private Partnerships lays the ground for the active development of state-owned real estate and the more efficient provision of public goods and services through partnerships with the private sector. The privatizations program also goes very well as, so far, in 2006 we have reached 81 percent of our privatization target revenue for the year (€1.34 billion), after the placement of 7.2% of the outstanding shares of the Agricultural Bank of Greece (ATE Bank) and the sale of 34.8% stake in the Postal Savings Bank".

On inheriting an economy with high budget deficits & On Greece's international competitiveness

"When we took office, the Greek economy was indeed facing high budget deficits, an escalating public debt and several persistent structural imbalances. These problems were the main reason for the economy's low international competitiveness and for the low productivity in the domestic goods and services sector. One of the top priorities in our agenda has been to correct the aforementioned imbalances by promoting the conditions for prosperity, economic growth and social cohesion in Greece. The policy of gradual fiscal adjustment and the structural reforms we are implementing pave the way to achieving this objective. It is indicative that in 2005 the general government deficit was reduced from 6.9% of GDP to 4.5% of GDP".

On Greece's role as the only EU member in the region

"Greece is located at the centre of a fast developing economic region and is no longer an isolated economy of 10 million inhabitants. Greece is at the centre of a region of 140 million people, a member of the European Union, and of the Eurozone. It has the most advanced social, political and economic infrastructure in Southeast Europe, and is active in promoting the integration of its neighbours in the European Union".

On FDI in Greece and South Eastern Europe

"Many multinational corporations have chosen Greece to set up their headquarters for their operations in Southeast Europe and the Middle East. Greek Foreign Direct Investment contributes to the development and the stabilization of the Balkan economies. In less than ten years, Greek investment in Southeast Europe has exceeded 10 billion euros. By investing and trading in, or through Greece, one can gain access to a dynamic network of Greek companies that do business in the Balkans and the Eastern Mediterranean, especially in view of the accession of Romania and Bulgaria to the E.U. and Turkey's European perspective. Greece is not only the gateway of foreign investors to Southeast Europe, but it is also the gateway of local enterprises to the international capital markets. Greece can offer the monetary and the political stability that foreign investors require in order to invest in Southeast Europe."

On the Investment Incentives Law

"The Ministry of Economy and Finance developed and implemented a Law for Private Investment Incentives for Economic Development and Regional Convergence which funds up to 55% of the investments made by older or newly established companies. This law has played a key role in improving the competitiveness of the economy and boosting entrepreneurship. Since the beginning of its implementation in March 2005 and as of July 14, 2006 more than 2,000 applications were submitted accounting for €4.4bn, more than half of them were approved, accounting for more than €2.1bn, and about 7,000 new full-time jobs were created".

"A new Investment Law, replacing the previous one, which expires on December 31st 2006, is currently being drafted and will be put in effect on January 1, 2007.The new Law- as was the case with the older one- will place particular importance on regional convergence and on the provision of important incentives for new investments, especially to small and medium sized enterprises and will cover up to 60% of the investment".

On the Public-Private Partnerships

"The Law for Public-Private Partnerships, which was legislated in September 2005, paves the way for the more efficient provision of public goods and services through partnerships with the private sector and the active development of state-owned real estate. The Special Secretariat for PPPs is already evaluating PPP projects that account for 800mn euros. Such projects cover various sectors, such as sport facilities, tourism and environmental infrastructure, or in the fields of health, education, and justice".