Danger of Grexit is past. New economic term: Grecovery!
Your Excellencies, Distinguished Guests, Ladies and Gentlemen,
It is a great honour and pleasure for me to be with you today. I would like to thank you for the warm welcome and for organising this Forum. A Forum that I am convinced, it will significantly contribute to the promotion and the deepening of the relations between China and Greece. And it will establish further synergies between two states, which represent two of the most ancient civilizations of the globe.
Philosophical ideas and beliefs, derived from the Chinese and the Greek Civilization had exercised tremendous influence on what is today perceived as global culture. Today, we take the baton, from our ancestors. As pioneers in the policy making and the business field we have to establish more common ground between our nations, by exploring the opportunities of enhanced business cooperation.
Ladies and Gentlemen,
In Greece, we are working hard to put our economy back into a growth mode. And the recent positive publicity from the international press (e.g Economist) sounds very encouraging to us. Major difficulties are still aheadbut, as Chinese philosophers have taught us, crisis also encapsulates the element of opportunity. And this idea reinforces our will to continue this difficult, yet necessary way, till the end.
POLITICAL ENVIRONMENT
And this will is shared by all three parties that support the government.
1. Stability in the internal political scene. The 3-party Coalition government, formed in June, under Prime Minister Antonis Samaras enjoys a significant majority in the parliament.
2. Fiscal Adjustment Package, a very disciplined budget, ambitious Taxation Bill, recent memorandum amendment have been approved, without problems.
ECONOMICS – WE HAVE ACHIEVED A LOT!
We have achieved the largest fiscal consolidation in OECD countries the last decades.
1. Greek deficit for 2012: Target €16,3bn Achieved €15,7bn, €0,6bn better.
2. Primary deficit fell from 10.6% in 2009 down to 1% in 2012. 2/3 of the adjustment coming from primary expenditure. And we expect in year 2013 a primary surpluss of 0.4% or €750m.
3. January – April 2013: Primary Deficit of €0,3bn compared to a target of €3,60bn primary deficit. €3,3bn better.
4. The public sector was downsized. The number of those employed has already been reduced by 14%.
5. The World Bank`s, in its recent Doing Business 2013 Report, improves the position of Greece from place 100 to place 78, in the overall Ranking. With very positive comments, recognising our economy as one of the 10 most improved globally in the rankings.
6. Also, OECD announced in January 2013 its assessment on the degree that its Member – States adopt reforms contributing to economic development and growth. Greece was the first among 30 OECD Member – States, with a significant grade difference compared to the second.
7. The best illustration:The last memorandum amendment agreed with Troika does not include additional fiscal measures
Of course, we will not feel relaxed until this ranking is transformed into growth and jobs.
ECONOMICS – WE HAVE ACHIEVED THEM WITH PAIN
1. Cumulative cuts in nominal public sector wages account for as much as 37%. And in some cases exceed 52%.
2. Unemployment: unpreceeded levels, around the area of 27%. With the unemployment among the young ones, till the age of 25, to be as high as 56%.
In addition to the above, Greece is experiencing its sixth consecutive year of recession. With the overall contraction in the GDP to be of the order of 22%.
But, as I told you we are determined to work hard to overcome this difficult situation. Looking forward, our priorities can be grouped in 5 major areas:
Ι. FISCAL STABILITY
First priority, to achieve our goals, is fiscal stability.
Because neither investments, nor development can take place within an atmosphere of ambiguity of remaining or exiting the Eurozone.
Danger of Grexit is past. New economic term: Grecovery!
Our ambition: 2014 back to the markets
Now we are able to assure future investors that: “If they invest, today, in Greece, in euros, the valuation of their investment in 10 years time will be in euros again” And in the new, business friendly environment we are creating it is very likely those investments to result in very attractive returns.
ΙΙ. LIQUIDITY
1. Since Samaras administration took office, €20bn back to Greek banks.
2. Aproximately €48,8bn. 45,6bn from Eurozone + 3,2bn from IMF. Additional €2,8bn approved by last Eurogroup, in a positive atmosphere. (+ €6bn, which according to initial plan should have been given in Q1 2013, most probably will by given in May).
– Recapitalisation of Greek Banks, around €25bn (total €50bn). At the end of the process a considerably more stronger banking sector will evolve,able to support the grecovery.
– €9bnthat the state owns to the private sector will start being returned in 2013 &2014. € 3,2bn have been approved, 1,5bn have reached the market.
3. A total of subsidies, Guarantees & Loans around €7-7,5bn
4. 102% the absorption of ESPA funds the second semester of 2012. Early April 2013Q 56.7% vs 49,2% EU average. From place 13 in February to place 8 in April. We achieve our targets.
5. New National Reference Strategic Frame (EU subsidies for cohesion & development):€18,5bn for 2014-2020.
III. STRUCTURAL CHANGES
Very positive IMF recent report, with particular emphasis on structural changes. Our main focus:
1. 15.000 underperforming civil servants will leave. They will be replaced on a 1 to 1 basis, by younger personnel, hired under transparent criteria. Civil servants at the age 35 – 45, (who generally possess better qualifications) will be promoted more easily.
2. Abolition of regulations preventing market entrance in several business sectors and professions.
3. Competitiveness gap closing
– Unit labour cost:↓25-29% compared to 2009 levels. Now at the levels of the period before Greece joined euro.
– Exports2012 (incl. petrochemicals & ships):€27,6bn, 14,3% of GDP. Increase by 13.4%.We will continue working towards a more extrovert Greece, within the frame of our National Strategy for Exports:Drasticreductionofthetrade balance deficit by 2014. Exports as % GDP: 2014 16%, 2015 17%.
4. Significant discounts on social contributions for companies hiring new employees.
5. “Business Friendly Greece” we are co-operating with OECD to promote competition on several market sectors. (tourism,construction materials,retail and manufacturing).
IV. ATTRACTING INVESTORS – NEW LAW
1. From a redtapeto aredcarpet country. From a country with certain bureaucratic barriers and obstacles to safe harbour for investments
2. New Investment & Development Law.
2.1 Central licensing authority for all Strategic Investments
2.2 Our Agency “Invest in Greece” will focus on attracting investments and supporting investors
2.3 Multi-license
2.4 No letter of credit (elimination of one of the greatest counter – incentives)
2.5 Possibility fortax incentives
2.6 Residence permits for all family members of the strategic investors. The same applies to buyersof fixed property above €250.000 (contract value).
2.7 Special Space Development Plans for Strategic Investments. A tool that the State used in order to create value for its own property is now extended to cover the Strategic Investors.
3. We already have some positive results. According to UN (UNCTAD) data, FDI in Greece was more than doubled in 2012($0,3bn in 2010, $1,1bn in 2011, $2,6bn in 2012) showing a rise of 128%.
3.1 TAP: €1,5bn., 478 k/m, 2.000 direct & 10.000 indirect job positions in manufacture and industry ie. Pipe construction
3.2 El DoradoGold: active in the mining/metallurgical sector of gold in Turkey, China, Greece, Brazil and Romania. Total investments of El Dorado Gold in Greece are expected to exceed 1 bil.$ during the next decade.
3.3 NCH (Kassiopi):€23 mil. Price value and initiation of investment €100mil.
3.4 Hewlett Packard agreed with our national railways (TRAINOSE) and Cosco, which manages the basic Greek port, Peiraeus, on the movement of its products to Central and Eastern Europe and North Africa.
3.5 New investments or domestic production increase: Unilever, Phillip Morris, Henkel, Nestle, SCA Hygiene Products, Barilla Hellas, Bic, KRAFT, Nokia – Siemens Networks.
Courts respond considerably more quickly to appeals. Legal Certainty.
V. CATALYSTS FOR GROWTH
1. Massive privatization programme.28 ongoing projects on infrastructure, real estate and various state-owned companies. €1bn approximately received so far.
3.1 National Lottery. Done!
3.2 Natural Gas (DEPA – DESFA). Good progress
3.3 Buildings (4 buildings sold – London, Nicosia, Brussels, Belgrade. 2 Taskendi & Lioubliana will be retendered)
3.4 1000 buildings will be transferred to Hellenic Republic Asset Development Fund within 2013.
2. Special Purpose Vehicle. AtticaSeafront Project.
3. We are making full use of the tools of Public Private Partnerships.
3.1 CruiseHarbor. 100% private funding
3.2 Waste management. 21 major projects €2,1bn.
1. The restarting of the 4 Motorways. Aprogramofprojectsexpectedtocontribute25.000 jobs directly and approximately50.000 jobs indirectly in the Greek Periphery.
2. The development of the 22 regional airports. In 2 blocks. To transform them from mere places of take-off and landing, to poles of attraction for local development.
Ladies & Gentlemen,
As the Government of Greece, we are determined to proceed with our reformative action. We are certainly aware that matters, which were not confronted for decades, must now be confronted within the narrow pressing limits of one year.
This, however, constitutes no reason for us to loosen our grip.
On the contrary, we must intensify our efforts. To turn the crisis into an opportunity.
To set solid foundations for a more extrovert Greece, more competitive and better oriented toward the attraction of investments and the support of entrepreneurship.
A Greece, credible partner in the International scene. A Greece, which will be able to look onto the future with greater optimism.