Greek central bank governor suggests more privatization to support recovery

4 October 2017
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Central Bank of Greece Governor, Yannis Stournaras, suggested privatizations amounting to 12 billion euros (14.1 billion US dollars) from 2018 until 2023 to support the recovery of the economy, Greek newspaper Kathimerini (Daily) reported on Tuesday.

The proposal was made during an event organized by the Athens-based Foundation for Economic and Industrial Research (IOBE) on Monday evening on the occasion of the publication of a book entitled “Beyond Austerity: Reforming the Greek Economy”.

According to Stournaras, focus on the privatization program which has so far not met the goals and timetables set in 2010 could help Athens in its argument to persuade international lenders to agree in allowing some more breathing space to the economy to support growth.

The amount raised by privatizations could cover the sum of reducing the primary budget surplus target from 3.5 percent of GDP to 2 percent until 2022, Stournaras noted.

According to the 2018 draft budget tabled to the Greek parliament on Monday, the Greek economy was projected to grow by 2.4 percent next year, up from 1.8 percent for this year. The primary surplus was estimated to stand at 3.5 percent of GDP, up from 2.2 percent forecast for this year.

Leading Greek economists who debated during Monday’s event on the causes of the Greek debt crisis and the growth prospects of the Greek economy expressed doubts whether the policies could lead to sustainable development.
Cypriot Nobel laureate Christopher Pissarides, one of the book’s editors, noted that Cyprus managed to exit its bailout program soon thanks to the 2013 “haircut” on deposits, while Greek governments struggled for several years to close fiscal gaps by increasing taxation.

Today the Greek state finances have been balanced, “but in a way that does not permit medium-term growth”, Nikos Vettas, IOBE director and one of the editors of the book said, referring also to flaws of the Greek tax system.
“What Greece needs is to build an extrovert economy. The state should support entrepreneurism,” Costas Meghir, Professor at Yale university underlined. Enditem

Source: xinhuanet

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