I have watched Mr. Samaras’ main policy speech in parliament on July 6
and I am wondering whether this was the Mr. Samaras of the previous two years or perhaps a twin brother of his. The Mr. Samaras of the previous two years seemed to know one word only – “njet”. Except perhaps for the last few months when he was a member of government himself, there was hardly anything constructive which could be read into his announcements. And there was very little of substance and most of it very confusing.
The entire structure of the speech was, at long last, the correct one. For much too long now, everybody has been discussing/criticizing the terms & conditions of financing for Greece. Very little attention was given to the purpose of financing, i. e. the underlying economic plan.
In the normal world, first comes the plan and the financing comes afterwards. If the plan is convincing, there will be no financing problem. Alas, what we have been witnessing todate is that everyone was debating the financing without really knowing what the plan was. This is like saying “I don’t know where I am going but the faster I drive, the sooner I will get there”.
In actual fact, a good economic plan is about the only effective negotiating instrument which a borrower can bring to the negotiating table. If the plan is so good that no thinking person can object to it, it is next to impossible to reject the financing of that plan.
In his speech to parliament, Mr. Samaras outlined 9 major themes of his plans for the economy. My surprise increased from one theme to the next because they were exactly the themes which I have been propagating in this blog. In detail:
First, “we give privatization priority“. What? Did I hear correctly? After two years of madly focusing on austerity measures, the first priority becomes privatizations! That is investments! That is new foreign investments! And to add insult to injurity for believers in state control and monopoly, the energy market is to be liberalized!
Second, not only those privatizations which have been committed in the memoranda but even privatizations beyond that! And then this: “Privatizations not only as revenue to cover the deficit. Instead, as an opportunity for development, to attract investment, to create jobs, to improve competitiveness”. Finally, there seems to be an understanding that, financially, privatizations are one-time gains which, at best, buy time to get more important things done. But much more important than the one-time financial gain is the know-how transfer which comes with privatizations and foreign investment.
Third, investments in infrastructure are a priority and they will create new jobs. That is in and by itself not a brand new idea but it is good to see it stated as the third on the list.
Fourth, the use of public property will be optimized. That rings a big bell with me because as I travel through Greece, I often see idle property where people tell me that it belongs to the state but that the state doesn’t do anything with it. Investors could do a lot with it. And what does Mr. Samaras have to say about this? “We are a country that will become investment friendly. Because investment creates jobs which is our number one priority today”. What a revelation!!!
Fifth, do everything to unblock EU Structural Funds for Greece. That is an old issue and the EU Task Force is working on it. It can only be good when its importance is revived by being mentioned as a priority in a policy delaration.
Sixth, close or merge dozens of public agencies. Apparently, hundreds of them have already been identified for action. What a positive perspective!
Seventh, take all possible measures so that deposits return to banks again. Mr. Samaras is not shy to talk about tax amnesties. Frankly, any trick in the book should be acceptable to get bank deposits back. Mr. Samaras talks about an electronic wealth register (thanks to Alexis Tsipras for that idea!); special legislation for undeclared income evident through property acquisitions in Greece and abroad; and more. All of them excellent ideas!
Eight, immediate action is to be taken against waste. E-government is expected to play a vital role. Note the statement: “Personally, I believe that bureaucracy is our number one enemy!” Amen!
Ninth, the process of clearing state debts to the private sector is to be accelerated. That would provide financial breathing space for many small and medium-sized businesses.
Throughout the speech, I heard soundbites which I have been wishing to hear for quite some time now. Soundbites like: “Reducing deficit by cutting waste is primary goal; generating revenues through privatizations and improved asset unilitzation is primary goal; structural changes which improve competitiveness of Greek economy are primary goal”; etc.
In fact, at one point Mr. Samaras had the courage to say: “Truth be told: employees and retirees have borne the bulk of the sacrifices so far!”
Well, as they say: “Words are easy, action speaks”. We will see in the next few months what kind of language the specific actions will speak. Hopefully a good one. The words may have been easy but they certainly were good ones as well!