The need for Greece to safeguard fiscal stability, avoid the mistakes of the past and place greater emphasis on productive investment was stressed earlier by SEV president Spyros Theodoropoulos, during a discussion with EY chief George Papazoglou.
According to the SEV president, the Greek economy is on a path to recovery, but has yet to overcome its structural weaknesses.
“The first thing we need to focus on is maintaining our fiscal discipline. We must treat it as sacrosanct and not return to the mistakes of the past”, Mr Theodoropoulos stressed, noting that the country must make the most of the current situation, in which it is better placed than in previous periods.
He said Greece was, in a sense, fortunate to face the major fiscal crisis at a time when Europe had greater capacity to offer support.
“Europe could then, but cannot now. We are lucky that we had the problem then and not now”, he said.
On investment, he stressed the need for it to be directly linked to productive activity and to generate greater value added for the economy.
“We must invest in production. A data centre may be a good investment, but its impact on the economy is different from that of a productive investment”, he said.
The SEV president also said: “As a country, we must ensure political stability and have governments capable of making the right decisions. We are on the path to recovery, but we have not solved our problems”.
In this context, he cited Romania as a striking example of a country where political instability and fiscal slippage are having a negative effect on investment decisions.
On the current state of the Greek economy, the SEV president acknowledged that the country had significantly improved its investment appeal, but stressed that it still faced serious challenges.
“We are more attractive than we were in the past, but we are not the most attractive. We are a small economy”, he noted.
Speaking about the investment gap created during the economic crisis, which continues to affect the country’s growth prospects, he described how far the Greek economy still has to go: “We have an investment gap. More than €100 billion in investment has been lost. We are not bedridden; we are recovering”.
Mr Theodoropoulos also highlighted the structural problems that hinder industrial investment, particularly the spatial planning framework.
He said spatial planning had been one of the industry’s biggest obstacles, but substantial steps had been taken in recent years to address it.
“Significant steps have been taken through cooperation between the ministry and SEV”, he said, adding that 300 local spatial plans are to be drawn up in various parts of the country.
“We hope local spatial plans will be drawn up that can accommodate industry”, he stressed.
Mr Theodoropoulos also made an interesting point about the political cycle and how it affects business decisions.
Responding to a question on the subject, the SEV president said election years were a factor businesses took into account, but made clear they could not become decisive in their decision-making.
The economy and business activity, he noted, continue regardless of the electoral calendar.
The SEV president’s remarks on taxation also drew attention, given that it had topped the agenda of business groups for years.
Mr Theodoropoulos said he believed Greece had now achieved a competitive level of taxation, despite still being next to countries with lower tax rates, such as Bulgaria.