At the recent Eurogroup in Sofia (27/04) Finance Minister Euclid Tsakalotos presented the government’s growth strategy for post-memorandum Greece. The plan aims at creating a new identity for the Greek state, based on social welfare, fairness and productivity. To achieve this goal the government will roll-out specific actions, including: modernising the public administration, reforming the justice system, restoring collective bargaining, designing a gradual rise in the minimum wage, establishing a development bank and encouraging private sector investment in research and development.
The growth plan identifies 7 specific key sectors that can support productivity and competitiveness: Transport, Infrastracture and Logistics, Energy, Agri-Food, Manufacturing, Shipping, Pharmaceuticals, Sustainable Tourism. The main policy objectives outlined in the govermentn’s plan are: ensuring fiscal sustainability, fostering sustainable growth, boosting exports and attracting foreign direct investment, supporting the 7 Key Sectors, boosting start-ups and SMEs, sstablishing structural conditions for growth, ensuring fair and inclusive growth and finally, making use of financing tools. In more detail:
- Ensuring fiscal sustainability
- Keeping to primary fiscal surplus of 3,5% GDP until 2022
- Using available tax space to reduce tax burden and increase social spending
- Achieve real GDP growth above 2% in the medium term
- Continue implementing Public Financial Management Reforms
- Tax Administration Reforms in order to further tackle tax evation
- Fostering sustainable growth
- Improving the Business Environment: build a modern public administration; reform justice (accelerating the hearing of cases, eliminating backlogs etc); create a stable, growth and investment friendly tax system; expand functions and further digitize one-stop-shop for businesses; simplify licencing; complete the Intergrated Spatial Planing and the National Cadaster.
- Boosting Exports – Attracting Foreign Direct Investment
- Creating more and better jobs (design and implement efficient Active Labour Market Policies; continue efforts to further reduce undeclared work; reinforce the vocational education and training system; restore collective bargaining; gradual increase in minimum wage)
- Supporting 7 Key Sectors (Transport, Infrastracture & Logistics, Energy, Agri-Food, Manufacturing, Shipping, Pharmaceuticals & Sustainable Tourism)
- Boosting start-Ups and sMEs (reallocate resources towards R&D to promote innovative entrepreneurship: EquiFund; encourage private sector investment in R&D; support capacity building in Higher Education and research organizations: Hellenic Foundation for Research and Innovation; support flagship initiatives with strong innovation potenial: agrifood, presicion medicine and cultural heritage).
- Establishing structural conditions for growth
- Comprehensive strategic action plans under implementation in all infrastracture and network industries: energy, transport & logistics, digital economy, water.
- Managment of state assets: Hellenic Corporation of Assets and Participations S.A., Hellenic Republic Asset Development Fund (HRADF), State-Owned Enterprises, Real Estate.
- Ensuring fair and inclusive growth
- Inclusive education
- Social protection for vulnerable groups (Roma, elderly, homeless)
- Universal and effective healthcare
- Regional development and territorial cohesion
- Youth at the top of the agenda
- Making use of financing tools
- European Structural funds
- Public Investment Program
- Juncker Plan (EFSI)
- International Financial Institutions
- Mixed-funding programs
- Development Law
- Hellenic Development Bank
- Financial Sector
The growth plan has to be aproved by member-states of the Eurozone, and according Finance Minister Euclid Tsakalotos, it was well received at the Eurogroup meeting in Socia. Speaking to “Sto Kokkino” radio station (03/05), Tsakalotos said that the heads of the institutions will return to Athens on May 14 and Greece will reach a staff-level agreement in the next Eurogroup on May 24. The fourth review of the Greek programme will then be concluded at the June 21 Eurogroup meeting in Luxembourg, he added.
Tsakalotos said that the country’s “comprehensive growth plan” must be “credible to both foreigners and Greeks” and offered examples, such as raising the minimum wage, collective labour negotiations and a social programme in schools and hospitals.
“Growth will not be just for those who gained from the recession,” he said, adding that society must participate in any gains made. Referring to reforms, he noted the need to strengthen the investment climate, speed up justice and combat bureaucracy.
Commenting on the type of post-programme surveillance that will be adopted in Greece, Tsakalotos said this will have no prior actions though the monitoring of Greece “might be a little closer” than that of other EU countries. “There is surveillance of targets and surveillance of means in the programme. The institutions will have a say on some major reforms but not a big say on how you get from 3.5 pct of GDP to 2.0 pct. We will have the biggest say concerning the means,” he said.
Asked whether the high primary surpluses targets might change, Tsakalotos noted that Greece must first wait and see on what terms it will exit the programme and strict surveillance, what is decided on debt relief and whether the Macron agenda is adopted.
On Greece’s debt, the minister said talks are continuing and will be completed at the June 21 eurogroup.
Read more: Greece ready for a “clean” exit from memoranda; Greece’s post-memorandum era: developmental and social goals; Christos Staikos on the rise of investment interest in Greece; Researchers & Research return to Greece