In a recent meeting of the Federation of Greek Industries/SEV with regional industrial boards a call was addressed to the Government – but also to public opinion – for the investment gap that exists in the Greek economy to be treated as a national priority. According to SEV, investment has lagged in 2018, when it reached 11.1% of GDP (compared to 12.9% in 2017). True enough, new investment in machinery or electronic equipment surged forward (by +15.9% and +16.8% respectively), but overall investment remained weak, mainly due to the low pace of construction. Today’s Greece, after a decade of financial crisis and three successive Adjustment Programmes, has to show investment levels of just 55% of EU average of 20.5% of GDP.
The yearly rate of 5% growth in investment that is factored in the present Mid-term Programme for Greece would place at a 2039 timeline the necessary closing of the existing investment gap that keeps the Greek economy trailing its EU counterparts – and leaves joblessness at socially unacceptable levels.
SEV pays tribute to recent decisions such as accelerated depreciation and/or tax breaks for energy equipment, R&D spending or new hirings, as well as to procedure simplifications for the establishment of new businesses. Still, much remains to be done in cutting administrative red tape,, tax treatment/carry-forward of corporate losses, group taxation, further use of accelerated depreciation as well as horizontal cuts in tax rates on business. An area of special concern remaining is the practice of environmental licencing, where procedures remain slow and at times capricious.
To SEV, reform fatigue is evident in today’s Greece; but a new surge forward is needed if the productive structures of the Greek economy ae to be really revamped and acceptable employment as well as income levels achieved.