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Event on the Greek Economy in Cyprus

“With tangible results, Greece is moving in another direction, diametrically opposite to the estimates of many, five months ago, that the country would go bankrupt by the end of 2010. We aim - and we will achieve this - not just to overcome the crisis but to grow, through the formation of a sustainable productivity model”.
The comment was made by the Deputy Minister of Finance, Mr. Philippos Sachinidis, in his speech at an event in Nicosia, organized by Eurobank EFG. The Deputy Minister analysed the policy of the Government and its financial plan regarding both public finances and structural changes.
In the same event, Eurobank EFG’s Deputy CEO, Mr. Nikolaos Karamouzis, stressed that "Greece will be able to overcome the crisis without remission. The alternative would be disastrous for the economy, the society and the country. International markets still have serious reservations about the success of the Greek effort, but the shift of markets in recent weeks, marked by an interest in the purchase of Greek bonds, is encouraging.”
This spirit prevailed in the discussion between the Director of the Central Bank of Cyprus, Mr. Athanasios Orphanides and the Chairman of Eurobank EFG Mr. Efthimios Christodoulou. Mr Christodoulou, along with the Deputy Managing Directors of Eurobank EFG Messrs Nikolaos Karamouzis and Michael  Colakides, the Group’s Chief Economist, Prof. Gikas Hardouvelis and the head of Eurobank EFG Cyprus Mr. Michael Louis, had a series of meetings with political and economic dignitaries in Cyprus.
In the event, held in Nicosia  and attended by over 250 guests from the business world, Prof. Hardouvelis presented a series of positive factors on the Greek Economy. These factors, which have been identified by relevant research and analysis by Eurobank EFG, support the return of stable and high growth rates in the coming years, the reduction of the debt to GDP ratio, and the parallel creation of high primary surpluses.
As per Eurobank EFG research, Greece’s definitive exit from the current crisis and return to growth require the following:
First, the development of a friendly environment for business and private investment, and a shift of the culture currently prevailing in both the Greek state and society, who regard business and private investment initiatives with suspicion and mistrust,
Secondly, the promotion of a competitive tax framework for businesses, with low and stable tax rates for distributed profits, at par with rates applied in countries of the wider geographic region,
Third, the revival of private, foreign and domestic investments and the restart of small and large infrastructure projects by removing the legal, bureaucratic, territorial and state interventionism barriers that create conditions that lead to the suffocation of entrepreneurship in Greece, while in parallel also upgrading the education and justice system, infrastructure and institutions, to facilitate and promote business and labour productivity,
Fourthly, the creation of a national plan in Greece for a new, open path of economic development, based on value-added products and services, with specific targets and timeline, focusing on the areas where Greece already has or is able to achieve competitive advantages,
Fifth, the effective use of EU funds (€ 10-12 billion), which are caught in the red tape of government bureaucracy, by combating favouritism, and focusing on the main objectives of strengthening an extrovert economic development, the flourishing of healthy entrepreneurship, the strengthening of a friendly investment environment, the promotion of business research and innovation, the upgrading of infrastructure and the improvement of human capital skills,
Sixth, the normalization of Greece’s access to international capital markets and the development of sound liquidity in the Greek market, which depends to a large extent on the consistent implementation of government policy and the restoration of the country’s credibility in international markets,
Seventh, the implementation of a comprehensive and bold plan for the utilization of big public assets, through privatization, concessions, leases and long-term strategic partnerships with the private sector. The value of public property of the Greek state is estimated at € 270 billion.  This property could be utilized, not only to reduce public debt, but also to strengthen the country’s growth prospects.
In his speech, the Deputy Minister of Finance, Mr.F.Sachinidis, explained the Government's economic policy, which is based on three pillars:

A. Public finances, where the goal is to reduce the deficit to below 3% of GDP by 2014. The new tax law, the acceleration of the hearing of tax-related cases and the adoption of multi-annual budgets are some of the key structural measures to curb the deficit.B. Structural changes, aiming in reforming the production model in order for the economy to become competitive and outward-looking. The deregulation of restricted professions, the removal of 30 important barriers to the establishment and operation of enterprises, the structural changes in Social Insurance, the changes in labour relations, the creation of lasting and positive investment conditions, are indicative interventions of a policy that aspires to bring on long-term economic development.
C. Stability of the banking system. Several measures have already been implemented to ensure that banks remain healthy, with a strong capital base. The new credit growth support scheme, providing guarantees to the banking system amounting to 25 billion Euros, adds on the programs already implemented and, in conjunction with the creation of the Financial Stability Fund, shield and strengthen the financial system. At the same time, the supervisory role of the Bank of Greece is extended, so as to include the supervision of insurance companies.
The Government’s economic policy meets the society’s approval and is hailed by the international community. It features a series of interventions that can set the ground for a long-term and stable prosperity of the Greek people. Among them, an extensive 3 billion Euros privatization program, which aims in both mobilizing the domestic private sector and attracting investment capital from abroad. The first positive signs are already visible.
Eurobank EFG's Deputy CEO, Mr. N.Karamouzis stated that if the aim of Greece is to return to growth, then the responsibility of the Greek state, especially in the current difficult circumstances, is to establish conducive conditions and a suitable environment that will accelerated economic growth, and foster entrepreneurship, private investment and economic openness. The above presuppose the rapid decline of the state's domination and interventionism in the economy and the concomitant reduction of state overspending, tax evasion and bureaucracy. As long as the current stifling, corrupt and interventionist framework continues to exist, as long as structural changes and reforms are delayed, foreign and domestic investments will flee or avoid Greece.
During the press conference, referring to the Greek banking system, Mr. Karamouzis said that its main problems that currently persist  are liquidity pressure, high funding costs and limited access to international capital and, secondarily, the cost of provisions for bad loans. Liquidity conditions gradually improve in Greece and abroad. In recent weeks, there has been interest in investing in government securities, but the efforts to change the climate, strengthen the confidence of domestic and international investors in Greek risk and upgrade the credibility of the country should continue.
On the presence of Eurobank in Cyprus, Mr. Karamouzis commented that the Bank has chosen to develop its business rapidly, aims to double its branch network in the coming months and to increase its lending, which currently stands at €800 million, while customer deposits total more than €2 billion. Stressing the importance the Group attaches to the “investment invitation”, as he termed it, of the Cyprus market, Mr Karamouzis stated that Eurobank Cyprus is contemplating the possibility of establishing a subsidiary bank in Russia, while it also plans to strengthen its presence in London.