World Report

Southeastern Europe’s most dynamic economy expects long-term gains from the 2004 Athens Olympics

wept into government by a landslide at the polls in March, Prime Minister Costas Karamanlis finds himself at the helm of a country buoyed up by national pride and firmly in the international spotlight. The return of the Olympic Games to Athens – preceded by the unexpected bonus of victory in the Euro 2004 Football Championship – has focused international attention on a rapidly modernising Greece, eager to show its new face to the world.

“After hosting the Olympics, Greece will be a more experienced, a more optimistic and self-confident country,” Dr Karamanlis predicts. “All our efforts are now focused on ensuring that the Games will have a long-lasting impact on the economy.”

The election of the conservative New Democracy party led by Dr Karamanlis – ending more than a decade of Socialist rule – was a clear indication that the Greek people were eager for a new start.

Dr Karamanlis has promised a new era in public administration and a strong focus on increasing the international competitiveness of the economy. “We are ready to take the necessary measures,” he declares. “Greece has strong potential for investment, and has to develop sectors where it possesses relative advantages, such as tourism, agriculture, energy production, telecommunications and transport.”

The administration is committed to transparency, efficiency and protection of public interests. It aims to reduce government involvement in the economy and increase effectiveness in the provision of services to citizens. Bureaucracy is to be cut and advantage taken of new technologies to advance e-government and hasten the development of an information society.

Kostas Karamanlis
Prime Minister

‘We are ready to take the necessary measures’

Greece is becoming a hub for the fast-growing economies of Southeastern Europe, the Balkans and the Eastern Mediterranean, and is an ideal launchpad for new business ventures in the region.

The government aims to attract fresh foreign direct investment and to boost the economy by improving the regulatory framework and the general business climate. The tax system is to be comprehensively reformed, a new policy for exports is being introduced and big state enterprises are to be privatised; future candidates include telecoms giant OTE, National Gas Corporation DEPA, Hellenic Petroleum and the National Bank of Greece.

Speedier and optimal utilisation of national and EU resources is a paramount objective and a modern system of tenders for public projects is being introduced to ensure fair competition. “Among our top priorities is to utilise the EU resources correctly and effectively and promote the co-financing of projects,” says Dr Karamanlis.

In addition to benefiting Athens and the other Olympic cities, the huge EU-backed upgrade in infrastructure that has accompanied the Games has provided improved transport links with neighbouring countries and other EU states through projects like the Egnatia Odos motorway and the new Athens international airport.

The accompanying construction boom, low interest rates, EU funds and the liberalisation of credit markets have heightened business activity and raised expectations for Greece’s economic convergence with more advanced members of the EU.

Savvas Tsitouridis
Minister of Agriculture

‘We need to stabilise the quality of our products, certify and promote them”

Greece boasts growth rates that have been outpacing the EU average since 1996 and is expected to continue to do so for at least the next two or three years. Real output grew by 4 per cent in 2003 and is forecast to rise by 4.2 per cent in 2004.

Services comprise the fastest-growing sector in the economy, accounting for more than 70 per cent of GDP and around 60 per cent of jobs; tourism and shipping make the largest contributions. Other fast-growing sectors include the food and ICT industries.

The agricultural sector, which accounts for around 8 per cent of GDP and 20 per cent of employment, is still the largest in the EU. The government wants to make it more competitive, and has plans to revitalise rural areas.
Minister of Agriculture Savvas Tsitouridis says the focus must be on producing high quality goods at competitive prices. “There are great opportunities. We need to stabilise the quality of our products, certify them and promote them, both within Greece and to the EU.”