‘The international story is, we’re a basket case’

‘The international story is, we’re a basket case’

The Greeks are in the streets, protesting against tough austerity measures and labor market reforms. But Greek finance minister George Papaconstantinou says the measures are vital.

July 8, 2010 7:16 by Iason Athanasiadis

Will there be more privatizations?

Some. For example, we’re issuing four new licenses for casinos. This will hurt the existing casinos, but bring revenue for the state. There’s also a lot of unregulated online gambling that we need to look at.
We have high stakes in energy, ports, telecom, water, banks, and then we have real estate that needs to be exploited properly. I don’t mean forests, but commercially interesting real estate inside the cities.
The state sits on some very expensive property that could be sold, rented out, part of a commercial vehicle that could be floated. Estimates of the total value of real estate owned by the Greek state vary from the very conservative, 30 billion euros to the wild, 300 billion euros. Somewhere in between lies reality.
On the expenditure side you’re cutting a lot of fat that exists, and that doesn’t hurt growth. You have this potential for unleashing parts of the economy through opening up closed professions and changing conditions in the labor markets.

Nevertheless, Greeks are not exactly anxious to get jobs in the private sector.
Greeks are traders by nature and they do very well when let loose. But in this country entrepreneurship has [received] a very mixed review from people. That partly has to do with heavy hand of state and a particular political culture that followed the end of dictatorship (in 1973). Once you’ve built all these impediments to competition, it’s much harder to take them away.

The markets have savaged the euro. Will your reforms be enough to stop this trend?

I think that the markets have been very skeptical in adapting to a new reality, which is that there is a new government that is doing things very differently to how they were done in the past. If you look at the economy’s fundamentals today and compare them to four months ago, we’re hitting the milestones we said we would. Yes, we’re in a recession, but [we are] taking decisions to address them. That doesn’t justify the kind of borrowing spreads we’re seeing.

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Tags: George Papaconstantinou, Greece, Greece austerity measures, Greece spending, Greek debt, greek economy, greek finance minister, greek restructure, greek strikes